Cross-Cultural Perspectives on Knowledge Management (Libraries Unlimited Knowledge Management Series)

Cross-Cultural Perspectives on Knowledge Management

David J. Pauleen Editor

LIBRARIES UNLIMITED

CROSS-CULTURAL PERSPECTIVES ON KNOWLEDGE MANAGEMENT

Cross-Cultural Perspectives on Knowledge Management Edited by David J. Pauleen

Libraries Unlimited Knowledge Management Series Danny Wallace, Series Editor

Library of Congress Cataloging-in-Publication Data Cross-cultural perspectives on knowledge management / edited by David J. Pauleen. p. cm. — (Libraries Unlimited knowledge management series) Includes bibliographical references and index. ISBN 1–59158–331–4 (alk. paper) 1. Knowledge management. 2. Corporate culture. I. Pauleen, David, 1957– HD30.2.C78 2007 658.4 ʹ 038—dc22 2006028274 British Library Cataloguing in Publication Data is available. Copyright © 2007 by Libraries Unlimited All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2006028274 ISBN: 1–59158–331–4 First published in 2007 Libraries Unlimited, 88 Post Road West, Westport, CT 06881 A Member of the Greenwood Publishing Group, Inc. www.lu.com Printed in the United States of America

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Contents

List of Figures

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List of Tables

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Foreword

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Acknowledgments Introduction SECTION 1: CONCEPTUAL APPROACHES TO CULTURE AND KNOWLEDGE MANAGEMENT

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Exploring the Relationship between National and Organizational Culture, and Knowledge Management

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David J. Pauleen, Ling-Ling Wu, and Sally Dexter 2

Culture: An Overlooked Key to Unlocking Organizational Knowledge

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Robert Mason 3

The Art of Systems: The Cognitive-Aesthetic Culture of Portal Cities and the Development of Meta-Cultural Advanced Knowledge Economies

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Peter Murphy SECTION 2: EFFECTS OF CULTURE ON KEY ASPECTS OF KNOWLEDGE MANAGEMENT

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Cultural Stretch: Knowledge Transfer and Disconcerting Resistance to Absorption and Application

Gerhard Fink and Nigel Holden

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Contents

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From Concept to Context: Toward Social-Cultural Awareness and Responsibility in the Organization of Knowledge

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Chern Li Liew 6

Managing Innovative Knowledge: Cultural Perspectives on Patenting

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Chad Saunders and Mike Chiasson 7

The Influence of National Culture on Knowledge Management in Virtual Teams

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Doug Vogel, Anne-Francoise Rutkowski, and Michiel van Genuchten 8

People’s Twist: The Cultural Standard of Loyalty and Performance in Former Socialist Economies

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Gerhard Fink and Maren Lehmann SECTION 3: RESEARCH AND CASES ON CULTURE AND KNOWLEDGE MANAGEMENT

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Institutional and Cultural Influences on Knowledge Sharing in Russia and China

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Kate Hutchings and Snejina Michailova 10

Asian Organizations Meet North American Management Theory: The Case of Singapore and Senge

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Kala S. Retna and Jane E. Bryson 11

The Peruvian Asparagus Cluster: Realizing Profitability from Social Capital and Shared Knowledge Management in a Traditionally Low-Trust Environment

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Luis S. Chang 12

Research and Development Knowledge Transfer across National Cultures

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Marjolyn S. W. Thiessen, Paul H. J. Hendriks, and Caroline Essers Afterword

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Index

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About the Editor and Contributors

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List of Figures

1.1 Culture, values, attitudes, and behaviors (Adler 2002)

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1.2 Extending Adler’s model to the level of organizations, groups, and teams

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1.3 KM model emphasizing the development of knowledge sharing behavior

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1.4 National culture, organizational culture, and KM

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5.1 Klemke’s context typology

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5.2 Structure of a cross-contextual knowledge organization system

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7.1 Significant attitude change between the pre-test and post-test on the item “Any kind of relationship had to be structured hierarchically to obtain harmony” on a 5-point scale (From –2 = Strongly Disagree to +2 = Strongly Agree) 121

7.2 Convergence between the pre-test and post-test on the item “How much is the presence of a leader in the group required?” on a 10-point scale, from 1 = not at all, to 10 = very much

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11.1 The Road to Frío Aéreo

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12.1 Knowledge transfer model

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12.2 Indicators of the impact of national culture on knowledge transfer

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12.3 National cultures of the Netherlands, the United States, and India

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List of Tables

5.1 Selected definitions of knowledge

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7.1 Synchronous versus asynchronous communication activities

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7.2 Experience of HK and Dutch respondents

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7.3 Expected and encountered problems

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7.4 Pre- and post-test characterization rankings

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7.5 Between and within nationality comparisons on the item “leadership”

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11.1 Culture and progress

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12.1 The knowledge transfer cultures at Akzo Nobel Car Refinishes R&D units

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12.2 Assessment of cultural differences and their impact on cross-cultural R&D knowledge transfer at Akzo Nobel Car Refinishes

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Foreword

What is knowledge management? To keep it simple, we could say “making sure you know what you need to,” where you refers to some group or organization that manages knowledge. Usually it is a company, but it could be a scientific community, or any other social entity, so let us use the word organization for now. In order to manage knowledge, the organization needs two things: a memory and means of communicating the knowledge. Knowledge management has been used as a synonym for information management. In this case it usually revolves around the use of technology, both “memory” and communication technologies. For others, knowledge management means the management of practices—and, by extension, people—in the organization. This means that learning, rather than technology, takes centre stage. The emphasis rests on managing organizational practice in such a way that people can learn what they need to know from one another. According to either school, communication between people is a crucial aspect of knowledge management. In its emphasis on communication, knowledge management is similar to culture, if we define culture as the set of implicit rules for the social game. Culture in this sense would refer to the management of the tacit knowledge of a group of people. This is the knowledge that specifies, for instance, when to see others as friends, competitors, enemies, or potential loved ones, and how to treat them accordingly. Groups that have culture in this sense range from teams to societies. Very few people have explicit knowledge of their culture; they take it for granted. This can happen even to those who are aware that faraway people have different cultures. To accept that we are culturally embedded ourselves can be even more difficult than to accept that others are. If we accept that the notions of culture and knowledge management are similar in their focus on communication, there is no escaping the idea that knowledge management as a conscious activity must build on the sort of implicit rules of the game set by culture. This book addresses a number of issues that come to the fore when one considers

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Foreword knowledge management as a culturally contingent activity. For instance, the very idea that knowledge can be managed as an asset separate from relationships between people is alien to most cultures in the world. Knowledge is always related to a person you have a relationship with, and any other knowledge is simply not relevant. As a consequence, to anybody who wishes to be socially visible, knowing people is still far more important than knowing the sort of things that are usually called “knowledge.” “Making sure you know what you need to” is dependent on culture in many ways. In most countries, some knowledge that might be very relevant is not managed because nobody could profit by doing so, or because powerful groups might take offence. In some cases the state itself acts as a censor. There may be limited communication between groups or between hierarchical levels. Organizations all over the world have a tendency to inherit the knowledge management mechanisms that prevail in other institutions of their society, such as the family and the state. Did you learn that it was wise to keep your mouth shut in front of your father? This is a lesson about hierarchy. You will probably do the same later, with your boss—despite knowledge sharing programs. Knowledge management is often formally undertaken in order to support innovation. But it is by no means a precondition for innovation that all members of the organization be engaged in knowledge management. Asian tiger countries have achieved tremendous growth and innovation while maintaining very authoritarian business models. When one looks at knowledge management across cultures, it turns out that one size does not fit all. This volume brings together a very readable collection of chapters that tackle the connections between culture and knowledge management from various perspectives. They are very different. Some I found creative, others thorough, most of them insightful; but every one was well worth reading. Together, they include many parts of the world and illustrate what I have just put forward—that knowledge management in its many facets is intimately connected to culture. I am pleased to be able to invite you, the reader, to enjoy this timely and important volume. Professor Gert Jan Hofstede Associate professor of Information Management in International Chains Social Science Group Wageningen University

Acknowledgments

David J. Pauleen would like to acknowledge the help of all those involved in the collection and review process of this book, without whose support the project could not have been successfully completed. These include, first and foremost, the authors, but also his colleagues at Victoria University of Wellington—in particular, Professor Gary Gorman. Special thanks to Jackie Bell, who was instrumental in helping to prepare the manuscript. A further note of thanks goes to the staff at Libraries Unlimited, which has made the publication of this book possible.

Introduction

Companies, educational institutions, nongovernmental organizations, governments and, of course, individuals work globally these days, and generally the modus operandi of each is the gathering, synthesis, sharing and storage (in no particular order) of data, information, and knowledge. In this global economy, knowledge is a critical resource (Drucker 1995), and organizations are striving to capitalize on their knowledge assets through effective knowledge management strategies and practices. Organizational knowledge can be in the form of patents and processes (manufacturing, etc.), but perhaps more importantly it is in the skills, knowledge, and experience in employees’ minds and the ability of individuals and organizations to learn and adapt to new situations. Most knowledge management is understood, and written about, from the perspective of the West and in particular the United States. This perspective tends to be scientific—that is, objective, quantifiable, analytical. There is nothing wrong with this as far as it goes, but it is limited and represents a form of cultural bias (Pauleen and Murphy 2005; Pauleen et al. 2006). And when we step outside a Western frame of reference, we discover that knowledge is a global phenomenon, which may be managed differently in different cultural contexts. To survive in a global age, we must understand this critical point. The manifestation of global knowledge occurs in many forms: from how foreign markets and financial systems operate, to why foreign people think and interact in particular ways that we cannot always understand or predict. It is clear that seeing others from our own limited perspective will lead to inadequate understanding and imperfect knowledge, lessening individual and organizational effectiveness. How, then, can we learn to both expand our knowledge assets and effectively manage knowledge in a global age? The answer lies partly in perspective taking—the ability to understand other worldviews and to relate this understanding to knowledge management. Worldviews underpin the insight and knowledge generated by a particular community. As much of the world’s knowledge is local in nature, we must learn to develop the ability to understand what knowledge is from as many perspectives as possible. With perspective taking as

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Introduction our foundation, we can then begin to develop more effective ways of managing knowledge across multiple functional perspectives: engineering, psychology, management, philosophy, religion, and many more. This book looks at knowledge and knowledge management from a cultural perspective. We argue that culture fundamentally influences how entities—from individuals to countries—understand and interact with information and knowledge. Culture has been defined as a “collective programming of the mind that distinguishes the members of one group from another” (Hofstede 1984, 21). This programming determines how people think, what they count as knowledge, how they solve problems—indeed, how they know and interact with the world. Such programming is rarely explored; yet it is deeply embedded in all of us. As they say, “You can take the boy out of the country, but you can’t take the country out of the boy.” However, understanding the impact of culture on our daily lives requires significant effort, and for this reason the study of culture is problematic in many areas of research and practice. As mentioned previously, culture operates at our deepest individual and societal levels and is generally not recognized in either researchers’ or practitioners’ worldviews. Some may be aware of the impact of cultural influences but place it in the “too hard” basket, perhaps at best paying it lip service with some off-the-shelf program or some basic cultural training, possibly in order to meet a prescribed regulation. Even for the few who are cognizant of the underlying and often overwhelming influence of culture on so much of what we do as individuals and organizations, it is a genuine challenge to recognize and learn the lessons of culture and apply them in even-handed and effective ways. This, then, is the challenge of this book: to introduce knowledge and knowledge management perspectives from different cultures, in different contexts, using different processes for different purposes. The authors, who come from many different countries and cultures, as well as a variety of backgrounds, have done a commendable job. Since the iterations of culture and knowledge are nearly limitless, all we can do here is begin the journey to increase awareness among those individuals and organizations wishing to learn from and share with others. In the final analysis, it is for the reader to have a mind open to the challenges and opportunities of culture.

THE STRUCTURE OF THE BOOK The book is divided into three sections: Conceptual Approaches to Culture and Knowledge Management, Effects of Culture on Key Aspects of Knowledge Management, and Research and Cases on Culture and Knowledge Management. The reader will soon discover that many of the issues raised in each of the chapters relate to and build upon each other, like parts in a complex but challenging puzzle.

CHAPTER SUMMARIES Chapter 1, “Exploring the Relationship between National and Organizational Culture, and Knowledge Management,” discusses and links the concepts of national culture, organizational culture, and leadership. The authors suggest that not only is culture a critical factor in the understanding of knowledge management, but that complex

Introduction relationships exist between the different cultural contexts of national, regional/ethnic, and organizational culture. These relationships affect knowledge management strategies and processes at both national and organizational levels. They model these relationships and discuss their implication for research and practice. In Chapter 2, “Culture: An Overlooked Key to Unlocking Organizational Knowledge,” the author argues that the multiple cultures of the people who comprise global organizations represent a potential knowledge asset that should be managed like any other organizational asset. He maintains that this can be done by understanding the cultural basis of learning and knowledge. This chapter outlines the recursive relationship between learning and knowledge, reviews recent research on the cultural foundations of learning and knowledge, and proposes a model of boundary spanning that can help global organizations meet the challenge of unlocking the knowledge represented by their diverse membership. Chapter 3, “The Art of Systems: The Cognitive-Aesthetic Culture of Portal Cities and the Development of Meta-Cultural Advanced Knowledge Economies” is an essay that leaps past current views of culture, suggesting new ways to understand the knowledge dynamics of successful local economies. The article discusses the role of pattern thinking, aesthetics, and design in the rise and sustenance of economically powerful portal cities, where knowledgeable people—regardless of culture—congregate and form part of a greater whole. Section 2 begins with a look at cultural factors in global knowledge transfer. Chapter 4, “Cultural Stretch: Knowledge Transfer and Disconcerting Resistance to Absorption and Application” summarizes the findings of a number of case studies to determine that time constraints and communication problems caused by cultural differences have a negative impact on initially positive expectations between international partners. The authors suggest it can take between two and seven years—or even longer—to achieve a smooth transfer and acceptance of knowledge from one party to another, if ‘the right people’ are deployed in the ‘right situation’. The right people are individuals who are locally sourced and equipped with appropriate personality characteristics; the right situation is a society which is open to the application of the knowledge being made available. Chapter 5, “From Concept to Context: Toward Social-Cultural Awareness and Responsibility in the Organization of Knowledge” argues that human language—and by extension information and knowledge—is highly context based. As such, it is detrimental to cross-cultural information retrieval and knowledge discovery systems if diverse contexts are forced into a single representational system, as they currently tend to be. The author argues that a hermeneutic approach could provide a promising avenue for developing a more productive framework that would support free and open dialog across competing heterogeneous contexts in the knowledge discovery environment. Chapter 6, “Managing Innovative Knowledge: Cultural Perspectives on Patenting” takes a cross-cultural perspective on patenting to explore differences and similarities in the management of innovative knowledge over time. Patents operate at the nexus of individual, legal, political, organizational, and societal interests and as such provide a useful vantage point for exploring cultural perspectives in the management of knowledge. The authors explore several interesting and critical tensions in the management of knowledge across cultures in the global environment, including the ownership of

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Introduction knowledge, effects on innovation and knowledge flows, and global enforcement, particularly in the area of the patentability of new innovations such as computer software, genes, and so on. Chapter 7, “The Influence of National Culture on Knowledge Management in Virtual Teams” contends that knowledge management is now clearly a critical factor in both organizational and academic settings in distributed contexts that increasingly engage multiple national cultures. This chapter explores aspects of national culture with respect to knowledge management in virtual teams based on the HKNET project, which involved participants from three continents and continued for seven years. Using their findings, the authors develop and present a model of the interaction dynamics associated with national culture, technology choice, and knowledge management processes and outcomes. In Chapter 8, “People’s Twist: The Cultural Standard of Loyalty and Performance in Former Socialist Economies,” the authors use knowledge management as a lens to focus on cultural standards, particularly with regard to issues of loyalty and performance in the former socialist economies of Eastern Europe. They explain how people—in order to survive—developed personal and internal knowledge management approaches in the face of external and hierarchical state controls. One result was the concealment and shift of knowledge from the state into private networks, thus establishing a form of market rationality within the planning rationality of a socialist economy. Section 3, “Research and Cases on Culture and Knowledge Management,” begins with Chapter 9, “Institutional and Cultural Influences on Knowledge Sharing in Russia and China.” This chapter, following up on the general topic of knowledge transfer introduced in Chapter 4, takes an in-depth look at the challenges inherent in transferring knowledge between western industrialized economies and the transition economies of (former) communist nations such as Russia and China, particularly in the context of home nation and subsidiary operations. Using interviews conducted with western and local managers in Russia and China between 1996 and 2003, the chapter specifically addresses the cultural and institutional factors that impede and facilitate knowledge sharing in Russia and China. Chapter 10, “Asian Organizations Meet North American Management Theory: The Case of Singapore and Senge,” reviews the connection between knowledge management and the learning organization, and argues that both concepts rely on culturally embedded theories and practices. The authors present a case study of the use of Senge’s learning organization concepts in one large Singaporean organization and reveal the cultural challenges that emerged in the process of applying essentially Euro-American management theories within an Asian culture. The chapter includes a discussion of the practical implications of these cross-cultural challenges for Singaporean organizations, multinational organizations, and transnational consulting. Chapter 11, “The Peruvian Asparagus Cluster: Realizing Profitability from Social Capital and Shared Knowledge Management in a Traditionally Low-Trust Environment” tells the story of the Peruvian asparagus cluster and how it became the world’s top exporter of fresh asparagus. The case focuses on how collective action and a shared knowledge management program tackled the problems of a complex asparagus logistic chain in spite of the historical low levels of trust and social capital in Peru. The author uses a three-pronged analysis to provide the background to understanding the basis for

Introduction cooperation in traditionally noncooperative populations and signals hope for trust and cooperation building in other clusters and possibly Peruvian society as a whole. Finally, Chapter 12, “Research and Development Knowledge Transfer across National Cultures” offers another look at the important topic of knowledge transfer, this time focusing on the area of multinational corporations’ dispersal of research and development activities across countries. The authors contend that the integration of the dispersed research and development (R&D) knowledge via knowledge transfer across cultural borders is essential for managing multinationals. The research confirms that cross-cultural knowledge is very often problematic, but it also provides a more positive outlook by showing that cultural differences are not just barriers to knowledge transfer; rather, they can also provide a stimulus to learn from and with others from different cultures. Interestingly, the research also shows that cultural differences tend to increase the difficulties of transferring explicit knowledge more than that of tacit knowledge.

REFERENCES Drucker, P. 1995. Managing in a time of great change. New York: Truman Talley Books/Plume. Hofstede, G. 1984. Culture’s consequences: International differences in work related values. Beverly Hills, CA: Sage. Pauleen, D., and Murphy, P. 2005. In praise of cultural bias. Sloan Management Review 46(2): 21–22. Pauleen, D., Everisto, R., Davison, R., Ang, S., Alanis, M. and Klein, S. (2006). Cultural Bias in IS Research and Practice: Are you coming from the same place I am?. Communications of the Association of Information Systems 17(17): 354–72.

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SECTION 1 Conceptual Approaches to Culture and Knowledge Management

1 Exploring the Relationship between National and Organizational Culture, and Knowledge Management David J. Pauleen, Ling-Ling Wu, and Sally Dexter

ABSTRACT Globalization and ICT have opened up opportunities for organizational knowledge to be shared across national and cultural boundaries both intra- and interorganizationally. In this context, an understanding of national (societal) culture and its relationship to knowledge management (KM) has become an essential requirement. In this chapter we discuss the concepts of national culture, organizational culture, and leadership and suggest that not only should culture be an element in the understanding of KM, but that there are complex relationships between the different cultural contexts (national, regional/ethnic, and organizational) and the way in which they relate and interrelate to affect KM strategies and processes at both a national and an organizational level. We then develop a conceptual model that shows the interrelationship of national culture and organizational culture and their mutual influence on organizational KM. We conclude with a discussion of implications for research and practice.

INTRODUCTION The rise of the global knowledge economy has been greatly driven by rapidly advancing information and communication technologies (ICT). These technologies have served to reduce traditional business boundaries and increase opportunities to participate in networks far beyond immediate physical locations (Barker 2000). In this new economy, knowledge has become an extremely valuable resource (Drucker 1995; Nonaka 1994), and organizations are striving to capitalize on their knowledge assets through effective knowledge management (KM) strategies and practices. Initial KM strategies relied heavily on ICT-based solutions to store and retrieve explicit organizational knowledge. However, these ICT-based strategies often failed to deliver meaningful results (Ambrosio 2000). Although technology is still a key component, this

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Cross-Cultural Perspectives on Knowledge Management single focus has been eclipsed by an increasing awareness of the importance of the organizational and social aspects of KM. To date, much of the KM literature has focused on corporate and organizational culture, with relatively little attention paid to the implications of national culture. However, KM, which is context embedded, is a particularly culturally dependent process (Glisby and Holden 2003; Nonaka and Toyama 2003). Effective KM practices developed by and for one culture may not necessarily be successfully used by other cultures (Pauleen and Murphy 2005). This is an important point as cross-cultural knowledge sharing has become more prevalent through the forces of globalization, advances in communications technology, and increasingly culturally diverse workforces (Cox 1991; Nemetz and Christensen 1996), as well as through international mergers and acquisitions, Internetbased e-commerce, and an increasing trend to global outsourcing. Meanwhile, dominant Western cultural assumptions about knowledge and KM influence KM research and development. Given these factors, an understanding of the influence of national culture is now, arguably, a critical requirement in understanding and implementing successful KM in organizations. Although it has been suggested that globalization will act as an antecedent to cultural homogeneity (Levitt 1983) and that cultural distinctiveness will be lost as global strategies displace strategies that revolve around national, regional, and cultural differences, a quick look at current world events may cause one to doubt the validity of this view, at least for the present. Within the international management area in general, as well as within the KM arena, this implicit culture-free assumption has been seriously challenged (Adler 2002; Glisby and Holden 2003; Holden 2002), and it is argued that cultural context is an important KM dynamic. This chapter expands on this argument by examining the relationship between national culture, organizational culture, and KM. We suggest not only that national culture is a significant factor in the understanding and practice of KM, but that complex relationships between the different cultural contexts (national, regional/ethnic, and organizational) and the way in which they relate and interrelate to affect KM strategies and processes must also be considered. The role of leadership is also explored, and we maintain that leaders who embody organizational culture and context may act as mediators in the relationship between national culture and KM.

DEFINING CULTURE There is a seemingly inexhaustible array of definitions of culture, with more than 160 definitions identified more than 50 years ago (Kroeber and Kluckhohn 1963). Although this range of definitions could be interpreted as representative of the complex nature of culture, in fact, the notion of culture is so deeply ingrained that it has become almost synonymous with our identity to the extent that everyone believes they understand culture (Westrup et al. 2002). Culture can be categorized in terms of three main elements: content, construction, and sustainability. In terms of content, culture has been defined as “a system of ideas” (Namenwirth and Weber, 1987, 8), “a distinctive, enduring pattern of behavior and personality characteristics” (Clark 1990, 66), and “collective programming of the mind that distinguishes the members of one group from another” (Hofstede 1984, 21). In essence,

National and Organizational Culture, and Knowledge Management the content of culture consists of a set of underlying norms and values of behavior, shared by a group of people tied together by powerful affiliations or bonds. The construction of culture, according to Schein (1985), results from the interaction of people and their environment. In particular, Schein emphasized the aspect of problem solving in culture, which is considered to be a valid way of thinking in order to respond to the surrounding environment. That is, culture is a set of valid knowledge, created and shared by a group of people, to solve the problems they face in their environment. In terms of sustainability, culture is transmitted by symbols, rituals, and stories, passed on from one generation to another (Kroeber and Kluckhohn 1963). The implicit (or even tacit) part, as well as the explicit part of cultural knowledge is sustained and transferred through information expressed in various ways. In this vein, Hall and Hall (1990) view culture as a system for creating, sending, storing, and processing information. However, Barham and Heimer (1998) point out that the standard anthropologically derived concepts of culture are out of touch with the connectivities and networks of the modern global economy. Recent research highlights the active role of people and the emergent, contested, and ongoing nature of culture, and people’s reaction to dynamic contexts (Giddens 1984, 1990; Myers and Tan 2002; Walsham 2002). Holden (2001, 162) calls for “a paradigmatic shift in the way culture is viewed and suggests that researchers reframe culture as infinitely overlapping and perpetually redistributable habitats of common knowledge and shared meanings.”

NATIONAL CULTURE There are a number of theories and models that have informed cross-cultural research, both methodologically and philosophically. Many of these are centered on the concept of national culture and are based on dichotomies or continuums of values, such as individualism/collectivism (Hofstede 1984); high and low context (Hall 1976); and monochronic/polychronic (Lewis 1996). These value-based models predict individual and group attitudes and behaviors based on national culture. However, Corbitt and colleagues (2004) suggest that such widely accepted structural frameworks may be too reliant on categorical descriptions that ignore differentiation within cultures, as well as the individual exceptions likely to be found to any general rule. Several studies have identified national culture in terms of work-related attitudes and values, to distinguish groups of people from other groups (Hofstede, 1984; Ronen and Shenkar 1985; Smith et al. 1996). Hofstede (1984, 1988) proposed five dimensions of national culture: individualism/collectivism, masculinity/femininity, power distance, uncertainty avoidance, and long-term versus short-term orientation. Some researchers have used this model to account for KM processes and found that the cultural dimensions of the Hofstede model might play a role in the KM processes (Ford and Chan 2003; Rossen 2003). The legitimacy of the concept of national culture, however, remains in question, as evidenced by the continuing debate in the literature. Scholars argue that globalization has enabled the emergence of the multicultural society, in which members of different regional and ethnic groups live and work in the same shared environment. Therefore, an identity based upon the notion of a nation-state does little to reflect regional and ethnic differences (Holden 2001; Myers and Tan 2002; Westrup et al. 2002). Indeed, McCrone

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Cross-Cultural Perspectives on Knowledge Management (1998) asserts that the quest for regional identities and decentralization reflects the need for the idea of national cultural identities to be challenged and usurped. The concept of national sovereignty has been linked to the notion of a national cultural identity, and it has been suggested that as globalization and economic, political, and cultural pressures further negate the importance of national sovereignty, this will affect the idea of a national cultural identity (Castells 1996, 1997; Featherstone 1990; Waters 2001). Hall (1992) contends that instead of thinking of national cultures as unified, they should rather be regarded as a discursive device representing difference as unity or identity. Most authors agree that nations may contain different cultures or subcultures within national borders, and that national borders do not necessarily represent culturally homogeneous populations (Groeschl and Doherty 2000). Rather than emphasize single national cultural identities, the challenge is developing theory that furthers understanding of heterogeneous cultures (Mercer 1992). Doney, Cannon, and Mullen (1998) stress their view that national culture is not a characteristic of individuals or nation-states but of a large number of people conditioned by similar background, education, and life experiences. Weisinger and Trauth (2002), through a combination of theoretical argument and practical research suggest that culture is, in fact, locally situated, behavioral, and embedded in everyday social negotiated work practices—a view also subscribed to by Holden (2001). Based on the social construction of reality theory (Berger and Luckman 1967), Corbitt and colleagues (2004) argue that national culture can be more accurately understood by seeking out the dominant social codes that frame a society’s values, attitudes, and behaviors. The debate between proponents of national cultural models and those who favor a more discrete or localized understanding of culture is unlikely to be resolved soon. National culture models certainly help to simplify cross-cultural research, whereas a more localized view of culture will more likely reflect the culture under study. An example of a local description of culture is the fascinating analysis of the factors that shape Taiwan’s character (as a people) by Yu and ChiangLin (2002). Based on personal observation, a review of secondary sources (e.g., educational statistics), and reflection, Yu and ChiangLin described five life experiences that together constitute a unique Taiwan experience: motorcycling, a belief in higher education, crisis consciousness, compulsory military service, and studying abroad and returning welleducated. Together, these life experiences heavily influence individual mental attitudes and behavior and society as a whole. For example, Yu and ChiangLin (2002, 354) argue that the overwhelming use of motorcycles in Taiwan, which—though often causing congestion and chaotic traffic conditions—shapes motorcycle riders’ personalities and skills (including young children riding with their parents) and the greater society in the following ways1 by training riders: • • • • •

to move accurately and swiftly with clear, specific goals to look for opportunities almost anywhere and anytime to be adaptive and flexible to be tough and take risks to act individually, with a small scale of vision

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not to strictly obey laws and regulations

Yu and ChiangLin’s five life experiences, although not proven in an experimental sense, nevertheless resonate with Taiwan residents and actually do go a long way

National and Organizational Culture, and Knowledge Management to providing an understanding of the local culture, one that is much more accurate and relevant than Hofstede’s descriptions, which in the case of Taiwan may no longer be accurate. Two of the life experiences—belief in higher education and studying abroad—point to a culture supportive of knowledge and knowledge acquisition from other countries.2

National Culture and Knowledge Drawing from psychology and cultural history, Nisbett and colleagues (2001) argue that the considerable social differences that exist among cultures affect, among other things, tacit epistemologies (theories of knowledge, including what counts as knowledge and degrees of certainly about knowledge) and the nature of cognitive processes (the ways by which people know the world). Comparing Eastern and Western traditions, Nisbett and colleagues (2001) group the cognitive differences between ancient Chinese and Greeks under the headings of holistic versus analytical thought. Holistic thought involves an orientation to the “context or field as a whole, including in particular the relationship between a focal object and the field and a preference for explaining and predicting events based on the existing relationships” (Nisbett et al. 2001, 293). They define analytic thought as detaching the object from its context, a tendency to focus on attributes of the object, to assign it to categories, and a preference for using rules about the categories to explain and predict the objects behaviour” (2001, 293). Nonaka and Toyama (2003) and Glisby and Holden (2003) state that Eastern people tend to think about their work in terms of the whole picture, whereas Western people tend to think of their work from their own individual vantage point. These cognitive biases are a major component of knowledge sharing and knowledge creation processes (Pauleen and Murphy 2005). According to Chia (2003), it has been a Western tradition to regard a knowledgeable person not as someone who has the ability to perform a task, but as one who can understand and render articulate and explicit—particularly in writing—the underlying causes of events. In contrast, in traditional Chinese culture learning and knowing came through direct, sustained, experimental practice. Chia (2003, 959) goes on to suggest that “the current preoccupation with explicit knowledge creation and management may need to be tempered by an equally important emphasis on direct experimental action as a valuable source of meaning, innovation, productivity and enhanced performance.” All that has been discussed here converges to support the major contention that national culture deeply affects how people process information in their environment and strongly suggests that this effect should be taken into serious account during the development and implementation of KM initiatives, especially in global contexts.

Culture, Values, Attitudes, and Behaviors Adler (2002) developed the model in Figure 1.1 to show how national culture influences the values of a culture and subsequently its attitudes and the behaviors of its members. An example of this is the Japanese culture: it values social harmony, which in turn creates an attitude of cooperation and subsequent behavior in which disagreements are rarely openly expressed. In this model, national culture appears fully fledged and hence

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Figure 1.1 Culture, values, attitudes, and behaviors (Adler 2002).

appears at the top, with values, attitudes, and behaviors following on from it. However, it is clear from the model that culture is influenced by the other factors and can change over time. This is illustrated when, for example, youth (as a subculture) behaviors change and slowly exert change on the overriding national culture. Globalization and the increasing pervasiveness of ICT tend to hasten cultural change in at least two ways: through direct exposure to other cultures and by facilitating networks and relationships, which allow new—and often transitory—cultural forms to emerge.

The Relationship between National and Organizational Culture Prior to 1980, organizational culture was largely considered to be independent of national culture (Ford and Chan 2003). This was epitomized by multinational companies, which managed national branch offices using expatriate managers and head office management techniques. Since this time, many studies have compared national and organizational culture, with the majority of the research focused on the link between organizational and national culture and the extent to which one influences the other (Clark and Mueller 1996; Morden 1995; Smith 1992). Earlier writers argue that the influence of national culture on organizational culture will decline over time (Evan 1975), whereas later researchers suggest that the collective “mental maps” of national culture seem to resist the convergence effects of international business practice (Clark and Mueller 1996; Laurent 1983). Others, in particular, Straub and colleagues (2002) use Social Identity Theory to explain how different cultures—including professional, ethnic, organizational, and national cultures—can coexist, and have different saliency with individuals at different times. The focus on culture as a mechanism to produce “relationship to self’” amongst members of an organization, suggests that its deployment as a governance technique is closely bound up with questions of identity (Hall and du Gay 1996). Beulens, Kreitner, and Kinicki (2002) contend that organizational culture is, in effect, a by-product of national or societal culture. They assert that culture influences organizational behavior in two ways: Employees bring their individual societal cultures in the form of customs and language, and organizational culture in turn affects the values/ethics, attitudes, assumptions, and expectations of an individual. Here it is suggested that Adler’s model can apply equally to organizations. Within organizations, the interplay of culture, values, attitudes, and behaviors is seen to be occurring in a more time-compressed process. Organizational cultures exert a powerful influence on an organization’s values, attitudes, and behaviors, as well as the values,

National and Organizational Culture, and Knowledge Management Figure 1.2 Extending Adler’s model to the level of organizations, groups, and teams.

attitudes, and especially behavior of its employees. In organizations that have been around for a very long time, it might appear that the organizational culture has also appeared fully fledged. However, it is obvious when we look at organizational histories that individuals, often in the form of founders and powerful leaders, have by the force of their personalities influenced the organizational culture through their own behaviors, attitude, and values. An example of this is how Konosuke Matsushita’s personality and earlier life experiences greatly influenced the organizational culture (values, attitudes, and behaviors) of the Matsushita company (Holden 2002). It is worth remembering in this case, however, that a great deal of K. Matsushita’s values and attitudes derived from the larger Japanese culture of which he was a part. (We will shortly return to the importance of this interplay of culture, values, attitudes, and behaviors, and individual actors.) Likewise, in the same way that Adler’s model applies to organizations, it can be further extended to groups, such as organizational functions (e.g., finance, sales), communities of practice, and even to teams if they exist long enough to form a team culture. In these cases, the time compression is further evident and it can be more clearly seen how individual actors can have an ever-greater influence on the culture of the group or team and its values, attitudes, and behavior. Finally, with regard to Adler’s model, the relationship between national culture and organizational culture, as seen in the case of Matsushita, is evident: a relationship that extends to the cultures of groups and teams, and ultimately, individuals themselves. This notion is captured in Figure 1.2.

National Culture and the Influence of Leadership in Organizations As alluded to in the case of Konosuke Matsushita and his eponymous company, the norms and values in national culture not only affect organizational culture, but

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Cross-Cultural Perspectives on Knowledge Management can also influence leadership and leadership processes in organizations (Ayman, Chemers, and Fiedler 1995; Bass and Avolio 1993; Hofstede, 1984, 1993; Hunt, Boal, and Sorensen 1990; Nikandrou, Apospori, and Papalexandris 2003; Triandis 1993). For instance, clusters of European countries that share similar cultural values also share similar leadership (Brodbeck and Frese 2000; Smith 1997). The leaders in Chinese organizations tend to use patriarchal leadership, as distinct from the productionoriented leadership or people-oriented leadership found in Western society. Brase (2001) has shown that management behaviors have a direct effect on workplace respect and cooperation. National culture influences organizational leadership through its impacts on the values and beliefs of both leaders and followers. Leaders are more likely to be affected and behave in the way that is accepted in their culture. Similarly, different expectations toward how a leader should behave could be potentially rooted in cultural beliefs. That is, followers hold common implicit expectations toward their leaders, which further shape their perception, valuations of the leaders, and hence influence the behavior of the leaders in that culture. For instance, people in cultures with high power distance are more likely to accept and even expect that leaders have an autocratic leadership style than others in cultures with low power distance. Moreover, business leaders in cultures of higher uncertainty avoidance are more concerned about control than creativity and innovation, and thus might be more likely to become transactional leaders instead of transformational leaders, when compared with leaders in cultures with lower uncertainty avoidance (Politis 2001). Wiig (2004, 115) argues that leaders, and other influential people, wield enormous influence in organizations by creating powerful reference models that “directly affect the attitudes, mentalities, and culture within their organizations.” Employees look to leaders as role models, often emulating their behavior. The mental models that these leaders operate from are often unconscious, a result of deep-seated cultural values and life experiences. In an empirical study of character traits of American and Taiwanese chief executive officers (CEOs), Judge (2001, 63) found “robust differences between these two sets of CEOs offering support for the ‘culture bound’ nature of leadership.” Character traits are strongly linked to leadership credibility, which has an equally strong impact on organizational trust and culture (Judge 2001). Evidently national culture can have a significant effect on leadership, and leaders can have a significant effect on attitudes and behavior throughout the organization (Trompenaars 1993).

Knowledge Management, the Organization, and Culture Knowledge management is the systematic and explicit management of knowledgerelated activities, practices, programs and policies within the enterprise (Wiig 2000) to effectively apply an organization’s knowledge to create new knowledge to achieve and maintain competitive advantage (Alavi and Leidner 2001). Sveiby (2001) identifies two broad approaches to KM. One focuses on the “hard” aspects such as the deployment and use of appropriate technology; the other focuses on the “soft” aspect: the capture and transformation of knowledge into a corporate asset. This second approach includes the management of people and processes.

National and Organizational Culture, and Knowledge Management The first categorization of KM is the management of information (Sveiby 2001). This approach views knowledge as objects that can be handled by information management systems. The key goal of this approach is to increase access to information through enhanced methods of access and reuse of documents through, for example, hypertext linking, databases, and full-text search. Networking technology in general (especially intranets), and groupware in particular, are key solutions. This approach is based on the idea that technology harnessed to a great volume of information will make KM work. The second categorization is the capture and transformation of knowledge into a corporate asset through the management of people (Sveiby 2001). This approach views knowledge as a process: a complex set of dynamic skills and know-how that is constantly changing. Commonly viewed as a management issue, approaches tend to focus more on innovation and creativity, in the style of the “learning organization,” as advocated by Senge (1999), where organizational behaviors and culture also need to be changed. To make this approach work, a holistic view is required, and often theories of behavior of large-scale systems are invoked. The aim here is to get people to share what they know. Processes are more important here than technology. Wiig (2004, 218) argues that a new generation KM (NGKM) is needed that provides guidance “to govern knowledgerelated investments, activities, and support systems that are people-focused and peoplefriendly and frequently supported by IT.” It is clear that KM is not simply a matter of managing information; it is essentially a deeply social process, which must take into account human and social factors (Clarke and Rollo 2001; McDermott 1999; Thomas, Kellogg, and Erickson 2001), as well as cultural issues. Thomas, Kellogg, and Erickson (2001) argue that a successful KM system is one that includes a knowledge community, where people can interact in the discovery, use, and manipulation of knowledge. Fundamental to the notion of community in KM is the understanding that community involves identifying and engaging in the social practices and relationships that are operating in a particular context (Rooney 2005). Nonaka and Toyama (2003) argue that the “knowledge process” occurs at the interconnection between (organizational) structure and agents, and is dynamic and interlinked from an individual-to-societal level. With regard to organizational KM, Nonaka and Toyama (2003) dispute the notion of the organization as a machine that solves problems, arguing rather that that the organization is an entity that creates knowledge through action and interaction within the organization and with its wider environment. They go on to say that in “knowledge creation, one cannot be free from one’s own context” (2003, 3), which we understand to mean culture in its widest sense. In terms of cross-cultural research, there are still relatively few studies that examine the relationship between national culture and KM (a major exception are the case studies found in Holden 2002), even though the importance of national culture on KM has recently been recognized. In Mason’s study of published reports of KM systems (2003), he found that national culture and ethnic background of users are rarely mentioned with only one case directly discussing the importance of national culture. Mason contrasts this with the attention given to culture in other information science studies (Walsham 2002) and suggests that KM designers may be implicitly adopting the “culture-free” hypothesis as a basis for design. This hypothesis is based on the fundamental premise that organizations are micro-social entities that exist without reference to the

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Cross-Cultural Perspectives on Knowledge Management Figure 1.3 KM model emphasizing the development of knowledge sharing behavior.

immediate societal environment, and in contrast to the idea that organizations match their structures to fit their societal environment. Of existing KM models, the most widely referenced is Nonaka’s SECI model (Nonaka 1994), which has been almost universally acclaimed and used by many organizations worldwide as a starting point for KM practices and which deals with both tacit and explicit knowledge. This model assumes that knowledge can be transferred through processes of socialization. However, Glisby and Holden (2003) assert that the Japan-specific cultural factors tacitly embedded in the model mean that it is not possible for it to be successfully transferred to Western nations in its totality. They claim that in order for the model to work in a Western setting, it might be necessary to first introduce Japanese values and management techniques, which would embed the required cultural conditions necessary for success of the model. Other KM models, including those of Boisot (1987) and Chase (1997), are also bereft of any consideration of cultural issues. Here it is suggested that the fundamental goal of organizational KM should be the development of the individual employee who is willing and able to share knowledge. Sharing behavior is what makes knowledge available to other individuals and the organization as a whole. With this mind, KM can be divided into two parts, which can be referenced in current business parlance as the upstream and downstream of knowledgesharing behavior (Figure 1.3). The upstream management of knowledge can also be thought of as nurturing knowledge sharing. It includes commonly accepted prerequisites and processes of KM such as developing social capital. This includes an organizational culture that encourages risk-taking and transparency, allows mistakes, sets up appropriate rewards and motivations that encourage knowledge sharing, and provides the time and space necessary for knowledge sharing, and where leaders champion KM and managers lead by example (e.g., Cohen and Prusak 2001; Davenport and Prusak

National and Organizational Culture, and Knowledge Management 1998; Horwitz et al. 2003; Mason and Pauleen 2003; Senge 1999; Thomas, Kellogg, and Erickson 2001; Wiig 2004). The downstream management of knowledge can be thought of as the harvesting of knowledge sharing. From a cultural perspective, this again includes the time and space for individuals to share knowledge, as well as the information and communication technologies that facilitate knowledge sharing behaviors and allow organizations to capture, hold, and disseminate knowledge (e.g., Alavi and Leidner 2001; Sveiby 2001). In this chapter, the concern is not so much with the downstream management of knowledge, but rather with the development of an organizational culture, which provides upstream KM values, attitudes, and behaviors that support and encourage knowledge sharing behavior in individuals.

Model of National Culture, Organizational Culture, and Knowledge Management A model is proposed here to explain the influence of national culture on organizational KM processes, and in particular knowledge sharing behavior (Figure 1.4). The model proposes that national culture affects organizational KM processes both directly and indirectly. It is based on the literature presented earlier and acknowledges the mutual influence of organizational culture and individual actors, including leaders and managers. The main propositions of this model state the following: •

•

•

•

National culture will directly affect knowledge-sharing behavior in individuals through its influence on the values and attitudes of individuals. The influence of national culture will be seen in how individuals perceive their roles and responsibilities with regard to knowledge sharing as they interact in organizations, groups, teams, and dyads. Organizational culture may mediate the effects of national culture on knowledgesharing behavior in individuals through its influence on the values and attitudes of individuals. Leadership and management values, attitudes, and behaviors with regard to knowledgesharing behaviors may have a particularly strong influence on both organizational culture and individual knowledge sharing behaviors. Purposeful organizational KM may influence both organizational culture and individual knowledge sharing behavior.

Figure 1.4 National culture, organizational culture, and KM.

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CONCLUSIONS AND IMPLICATIONS The notion of collective mental maps (Clark and Mueller 1996; Laurent 1983) and the assertion of culturally determined biases regarding KM practices (Chia 2003; Pauleen and Murphy 2005) are based on deep underlying metaphysical assumptions. Knowledge and its relationship to decision making and action point to a critical link between shared cultural values and attitudes toward knowledge and KM processes and the development of successful organizational KM processes. This link signals the need to develop “alternative conceptualizations and practical understandings of the strategic priorities, decisional imperatives, and modes of management operating in diverse geographical locations throughout the world (Chia 2003, 957). These alternative conceptualizations may be reflected in differing organizational attitudes toward education, cooperation, innovation, and creativity as well as specific practices in learning, training, and teamwork. There is little doubt that cross-cultural research is gaining increasing importance in the business arena. This derives from two main trends: diverse organizational workforces and globalization. More recently, globalization and the increased capacity of ICTs have heralded the arrival of the new knowledge economy where knowledge is the new rate of currency. However, despite an increasing international focus on KM and the importance of cross-cultural considerations in the transfer of knowledge (Wensley 2002a, 2002b, 2002c), there has been relatively little research on KM and cross-cultural issues.

Implications for Culture, Practice, and Research The debate on national culture, summarized in this chapter, begins to indicate just how problematic it can be to define culture and its boundaries when factoring in the cultural impact on a research or managerial problem. Although it is reasonable to conclude that culture will have some impact on how people understand and communicate knowledge, and therefore on how knowledge may be effectively managed in any given culture, the challenge to management and researcher alike is how to define culture and to determine what measures to use. We believe that cultural boundaries between nations are often indistinct and that different sub-cultures can exist within a single nation (Fukuyama 1995). Thus, similar to the concept of national culture defined by Doney, Cannon, and Mullen (1998), we do not necessarily equate national culture with the geographical boundaries of a nation. We do not assert that all groups in the population of a nation share the same set of values, attitudes, and behavior. We believe that in broad terms culture is transmitted from one generation to another by learning the information embedded in symbols, rituals, and stories; however, given the reality of the ever increasing interconnectedness of organizations and individuals, we agree with the view that organizations and individuals can be quite fluid and adaptable in creating effective ‘working’ cultures to suit localized, situated contexts. Knowledge management is acknowledged as a complex field that cannot be conducted with technology alone. Rather, integrated approaches that feature organizational, social, and technological emphases have become the trend for organizations who seek to create, use, and share knowledge to gain competitive advantage as well as foster creativity and innovation. Most research to date has been predominantly focused on the organization as the level of analysis in KM studies. The importance of national culture and its impact

National and Organizational Culture, and Knowledge Management on KM strategies and process is gathering momentum and some researchers are questioning the culture-free assumption that has long been accepted within KM (Glisby and Holden 2003). Furthermore, national culture can be seen to have important implications in concepts closely linked to KM success, including topics such as social capital, innovation, and creativity. Despite recognition of the importance of national culture, there remains a dearth of research in the area of KM, and almost none that has been carried out at a grassroots level. In this chapter we have developed an argument that national culture can directly influence organizational culture and KM processes. We contend that organizational culture can mediate the influences of national culture on KM processes. We also suggest that actors, such as leaders, also play a part in mediating and changing the structures of national and organizational culture. We developed a model that illustrates both the direct and indirect relationships between national culture, organizational culture, and knowledge sharing behaviors. It is up to researchers and practitioners to seek to understand and implement effective KM strategies that incorporate national cultural influences into organizational settings.

NOTES 1. Motorcycle riding in Taipei, as in many other large—particularly Asian—cities, is a phenomenon not easily explained; it needs to be experienced. The authors have had the experience and can attest to its personality shaping potential. 2. Yu and ChiangLin’s analysis provides an excellent description of a country that has experienced significant cultural change in a relatively short span of time. While still retaining many traditional cultural values, Taiwan has been willing to incorporate many institutions associated with other cultures, such as democracy, a globally integrated economy, and so on.

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Cross-Cultural Perspectives on Knowledge Management Beulens, M., R. Kreitner, and A. Kinicki. 2002. International OB: Managing across cultures from organizational behavior. New York: McGraw Hill Education. Castells, M. 1996. The rise of the network society. The information age: Economy, society and culture, Volume 1. Oxford: Blackwell. ———. 1997. The power of identity. . The information age: Economy, society and culture, Volume 2. Oxford: Blackwell. Chase, R. 1997. The knowledge-based organization: An international survey. Journal of Knowledge Management 1 (1): 38–49. Chia, R. 2003. From knowledge-creation to the perfecting of action: Tao, Basho and pure experience as the ultimate ground of knowing. Human Relations 56 (8): 953–81. Clark, P., and F. Mueller 1996. Organizations and nations: From universalism to institutionalism? British Journal of Management, 7, 125–39. Clark, T. 1990. International marketing and national character: A review and proposal for an integrative theory. Journal of Marketing 54 (4): 66–79. Clarke, T., and C. Rollo 2001. Corporate initiatives in knowledge management. Education and Training 43 (4/5): 206–14. Cohen, D., and L. Prusak 2001. In good company: How social capital makes organizations work. Cambridge: Harvard Business Press. Corbitt, B, K. Peszynski, S. Intranond, T. Thanasankit, T., and B. Hill 2004. Culture, information and code systems. Journal of Global Information Management 12 (3): 65–85. Cox, T. 1991. The multicultural organization, Executive 5 (2): 34–37. Davenport, T.H., and L. Prusak 1998. Working knowledge: How organizations manage what they know. Boston: Harvard Business School Press. Doney, P.M., J. P. Cannon, and M. R. Mullen 1998. Understanding the influence of national culture on the development of trust. The Academy of Management Review 23 (3): 601–21. Drucker, P. 1995. Managing in a time of great change. New York: Truman Talley Books/ Plume. Evan, W. 1975. Measuring the impact of culture on organizations. International Studies of Management and Organizations 5, 91–113. Featherstone, M. ed. 1990. Global culture: Nationalism, globalisation and modernity. London: Sage. Ford, D. P., and Y. E. Chan. 2003. Knowledge sharing in a multi-cultural setting: A case study. Knowledge Management Research and Practice 1, 11–27. Fukuyama, F. 1995. Trust: The social virtues and the creation of prosperity. New York: Free Press. Giddens, A. 1984. The constitution society: Outline of a theory of structuration. Cambridge: Polity Press. ———. 1990. The consequences of modernity. Cambridge: Polity Press. Glisby, M., and N. Holden 2003. Contextual constraints in knowledge management theory: The cultural embeddedness of Nonaka’s knowledge-creation company. Knowledge and Process Management 10 (1): 29–36. Groeschl, G., and L. Doherty 2000. Conceptualising culture. Cross-Cultural Management 7 (4): 12–17. Hall, E. T. 1976. Beyond culture. New York: Doubleday. Hall, E. T., and M. R. Hall 1990. Understanding cultural differences. Yarmouth, ME: Intercultural Press. Hall, S. 1992. The Question of Cultural Identity. In Modernity and its futures, ed. S. Hall, D. Held and A. McGrew, 273–325. London: Polity Press. Hall, S., and P. du Gay 1996. Questions of cultural identity. London: Sage.

National and Organizational Culture, and Knowledge Management Hofstede, G. 1984. Culture’s consequences: International differences in work related values. Beverly Hills: Sage. ———. 1988. Confucius and economic growth: New trends in culture’s consequences. Organizational Dynamics 16 (4): 4–21. ———. 1993. Cultural constraints in management theories. Academy of Management Executive 7 (1): 81–94. Holden, N. 2001. Knowledge management: Raising the spectre of the cross-cultural dimension. Knowledge and Process Management 8 (3): 155–63. ———. 2002. Cross-cultural management: A knowledge management perspective. Upper Saddle River, NJ: Pearson Education. Horwitz, F., T. H. Chan, and A. Quazi 2003. Finders, keepers? Attracting, motivating and retaining knowledge workers. Human Resource Management Journal 13 (4): 23–44. Hunt, J. G., K. B. Boal, and R. L. Sorensen 1990. Top management leadership: Inside the black box. The Leadership Quarterly 1, 41–65. Judge, W. Q. 2001. Is a leader’s character culture-bound or culture-free? An empirical comparison of the character traits of American and Taiwanese CEOs. The Journal of Leadership Studies 8 (2): 63–78. Kroeber, A. L., and C. Kluckhohn 1963. Culture: A critical review of concepts and definitions. New York: Vintage Books. Laurent, A. 1983. The cultural diversity of western conceptions of management. International Studies of Management and Organization 13, 75–96. ———. 1986. The cross-cultural puzzle of international human resource management. Journal of Human Resource Management Spring, 91–102. Levitt, T. 1983. The globalization of markets. Harvard Business Review (May–June), 1–11. Lewis, R. D. 1996. When cultures collide. London: Nicholas Brealey. Mason, D., and D. Pauleen 2003. Perceptions of knowledge management: A qualitative analysis. Journal of Knowledge Management 7 (4): 38–48. Mason, R. 2003. Culture-free or culture-bound? A boundary spanning perspective on learning in knowledge management systems. Journal of Global Information Management 11 (4): 20–37. McCrone, D. 1998. The sociology of nationalism. London: Routledge. McDermott, R. 1999. Why information technology inspired but cannot deliver knowledge management. California Management Review 41 (4): 103–17. Mercer, N. 1992. Culture, context and the construction of classroom knowledge. In Context and cognition , ed. P. Light and G. Butterworth, 28–46. Hemel Hempstead, UK: HarvesterWheatsheaf. Morden, T. 1995. National culture and the culture of the organization. Cross-Cultural Management: An International Journal 2 (2): 3–12. Myers, M., and F. Tan 2002. Beyond models of national culture in information systems research. Journal of Global Information Management 10 (1): 24–32. Namenwirth, J. Z., and R. B. Weber 1987. Dynamics of culture. Boston: Allen and Unwin. Nemetz, P. L., and S. L. Christensen 1996. The challenge of cultural diversity: Harnessing a diversity of views to understand multiculturalism. Academy of Management Journal 21, 434–62. Nikandrou, I., E. Apospori, and N. Papalexandris 2003. Cultural and leadership similarities and variations in the southern part of the European Union. Journal of Leadership and Organizational Studies 9 (3): 61–84. Nisbett, R., K. Peng, I. Choi, and A. Norenzayan 2001. Culture and systems of thought: Holistic vs. analytic cognition. Psychological Review 108, 291–310.

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Cross-Cultural Perspectives on Knowledge Management Nonaka, I. 1994. A dynamic theory of knowledge creation. Organizational Science 5 (1): 14–37. Nonaka, I., and H. Takeuchi 1995. The knowledge-creating company. New York: Oxford University Press. Nonaka, I., and R. Toyama 2003. The knowledge-creating theory revisited: Knowledge creations as a synthesizing process. Knowledge Management Research and Practice 1, 2–10. Pauleen, D., and Murphy, P. 2005. In praise of cultural bias. Sloan Management Review 46 (2): 21–22. Politis, J. D. 2001. The relationship of various leadership styles to knowledge management. The Leadership and Organizational Development Journal 22 (8): 354–64. Ronen, S., and O. Shenkar 1985. Clustering countries on attitudinal dimensions: A review and synthesis. Academy of Management Review 10 (3): 435–54. Rooney, D. 2005. Knowledge, economy, technology and society: The politics of discourse. Telematics and Informatics, 22, 405–422. Rossen, E. 2003. Cross-cultural inequality in IS: A preliminary exploration of Scandinavia and France. Cross-cultural workshop at ICIS 2003, Seattle. Schein, E. H. 1985. Organizational culture and leadership. , San Francisco: Jossey-Bass. Senge, P. 1999. The dance of change. New York: Doubleday. Smith, P. 1992. Organizational behaviour and national cultures. British Journal of Management 3: 39–51. Smith, P. B. 1997. Leadership in Europe: Euro-management or the footprint of history? European Journal of Work and Organizational Psychology 6: 375–86. Smith, P. B., S. Dugan, and F. Trompenaars 1996. National culture and the values of organizational employees. Journal of Cross-Cultural Psychology 27 (2): 231–63. Straub, D., K. Loch, R. Evaristo, E. Karahanna, and M. Srite 2002. Toward a theory-based measurement of culture. Journal of Global Information Management 10 (1): 13–23. Sveiby, K. 2001. What is knowledge management? http://www.sveiby.com/articles/KnowledgeManagement.html. Thomas, C, W. A. Kellogg, and T. Erickson 2001. The knowledge management puzzle: Human and social factors in knowledge management. IBM Systems Journal 40 (4): 863– 84. Triandis, H. C. 1993. The contingency model in cross-cultural perspective. In Leadership theory and research: Perspectives and directions , ed. M. M. Chemers and R. Ayman, 167–88. San Diego: Academic Press. Trompenaars, F. 1993. Riding the waves of culture: Understanding cultural diversity in business. New York: McGraw Hill. Walsham, G. 2002. Cross-cultural software production and use: A structurational analysis. MIS Quarterly 26 (4): 359–80. Waters, M. 2001. Globalisation. 3rd ed. London: Routledge. Weisinger, J. Y., and E. M. Trauth 2002. Situating culture in the global information sector. Information Technology and People 15 (4): 306–20. Wensley, A. 2002a. Plato’s philosopher kings and knowledge management. Knowledge and Process Management 9 (4): 203–4. Wensley, A. 2002b. Book review of Cultural management: A knowledge management perspective by N. Holden. Knowledge and Process Management 9 (2): 129. Wensley, A. 2002c. Book review of The social life of information by J. S. Brown and P. Duguid. Knowledge and Process Management 9 (4): 264. Westrup, C., S. Al Jaghoub, H. El Sayed, and W. Liu 2003. Taking culture seriously: ICTS, cultures and development. In The Digital Challenge: Information Technology in the Development Context, ed. S. Krishna and S. Madon, 13–27. Aldershot, UK: Ashgate.

National and Organizational Culture, and Knowledge Management Wiig, K. 2000. Knowledge management: An emerging discipline rooted in a long history. In Knowledge Horizons ed. C. Dupres and D. Chauvel, 3–26. Boston: Butterworth-Heinemann. ——— 2004. People-focused knowledge management. Burlington, MA: Elsevier ButterworthHeinemann. Yu, P. L,. and C. Y. ChiangLin 2002. Five experiences that shape Taiwan’s character. In Made in Taiwan: Booming in the Information Technology Era ed. C. H. Chang and P. L. Yu, 347–77. Singapore: World Scientific Publishing.

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2 Culture: An Overlooked Key to Unlocking Organizational Knowledge Robert Mason

ABSTRACT In the knowledge-based view of the firm, knowledge is a potentially strategic asset and should be managed as any other asset. A global organization comprising members from multiple cultures and ethnic groups has a potential asset in the knowledge of these different members, yet prior knowledge management approaches have ignored the cultural dimension of knowledge. Unlocking the asset represented by the cultural differences in an organization requires an understanding of the cultural basis of learning and knowledge. Recent research on the early development of the brain suggests a strong connection between how one learns and one’s early cultural environment, suggesting the need for rethinking the knowledge management effort. This chapter outlines the recursive relationship between learning and knowledge, reviews recent research on the cultural foundations of learning and knowledge, and proposes a model of boundary spanning that can help global organizations meet the challenge of unlocking the knowledge represented by the different cultural and ethnic backgrounds of their members. “Once people have learned to learn in a given way it is extremely difficult to learn in any other way. … Culture reflects the way one learns” (Hall 1990, 47).

BACKGROUND This chapter addresses the issue of culture and ethnic background as dimensions of knowledge management and the learning organization. The discussion that follows stipulates that the twenty-first century business and economic environment

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Cross-Cultural Perspectives on Knowledge Management is increasingly global and that an organization’s knowledge has become a strategic asset (Grant 1996). Learning, if not the only sustainable competitive advantage (Stata 1989), as a minimum can be considered to be one of the most important factors in competitiveness. Consequently, organizations have considerable motivation to manage their knowledge asset effectively and to use this asset as the basis for further learning. Toward this goal, many organizations have established systems of knowledge management. The interest in knowledge management, as indicated by the number of research articles on the subject, does not seem to follow the kind of increase, peak, and decrease pattern that has been observed in other management fads (Ponzi and Koenig 2002). Most knowledge management systems (KMSs) have the explicit or implicit goal of enabling the organization to have access to all relevant available knowledge (Alavi and Leidner 2001). However, a review of published reports of KMSs indicates that organizational members’ cultural and ethnic backgrounds are not considered in the design and operation of most KMSs, which take a Western (and mostly North American) approach (Mason 2003). This means that KMSs as currently envisioned and designed have a significant cultural gap that can lead to underutilizing some of the organization’s knowledge assets—those assets represented and embedded in the persons who are not from mainstream Western cultures. The systems as currently designed may unwittingly place barriers to knowledge access by those from non-Western cultures, and the knowledge of organizational members who are not from Western cultures may not be captured or communicated by the KMS. For example, as organizations become more global and comprise members who have distinct national and ethnic backgrounds, the organization could use these members’ knowledge to help tailor the organization’s sales and marketing efforts to meet the preferences of the distinct groups from which these members came. Bridging this cultural gap in KMS design requires an understanding of the recursive relationship between learning and knowledge, the significance of the tacit dimension of knowledge in this relationship and in knowledge transfer, and how differences in cultural and ethnic backgrounds affect knowledge and learning. To develop this understanding, the chapter posits the following: • • • •

Individual learning is a necessary (but possibly not sufficient) process for organizational learning and knowledge retention. The relationship between knowledge and learning is recursive; each affects the other. In this learning–knowledge relationship, the tacit dimension of knowledge performs a critical role. The early cultural environment of an individual affects how the individual learns; if one is to learn in a different way after childhood, external intervention may be required.

These propositions provide a foundation on which we might develop a set of principles that can guide the design of a culture-sensitive KMS. The following discussion summarizes the principles as postulates, which can be further examined through a model of boundary spanning at the syntactic, semantic, and pragmatic levels. The paper concludes with a discussion of the implications of the postulates and a model for the design of KMSs that might enable learning across and among multiple cultures.

Culture

DATA, INFORMATION, KNOWLEDGE, AND LEARNING This section develops the previously mentioned propositions in more detail and provides the foundation for the model of boundary spanning outlined in the subsequent section. Although the following discussion may discuss individual and social aspects of learning and knowledge separately, the integration of both perspectives is necessary for a full understanding of the interrelationships among knowledge, learning, and culture.

Individual and Organizational Learning and Knowledge Learning occurs when an entity has interpreted information in a way that enables the entity to change the range of behaviors that it may consider (Huber 1991). Note that in this viewpoint, learning can either enlarge the range of options (the entity sees new possibilities) or narrow the range of options (the entity can eliminate some actions from further consideration). Some researchers have argued that when an individual in an organization learns, the organization itself has learned (Huber 1991). Although one might debate this strong statement, as it equates individual learning with organizational learning without considering the need either for applying the individual’s learning or for communicating this learning to others, this position does emphasize that an individual—not an organization—is central to the process of learning. Organizational learning occurs as individuals in that organization make sense of data and information and apply their interpretation to the vision, strategy, standards, procedures, and operational activities that are communicated and implemented throughout the organization. As a consequence, we posit that individual learning is necessary for an organization to learn, but this may be an insufficient condition: The individual may need to act on this learning through communication with others, design and implementation of strategies or tactics, or the implementation principles that embed the new knowledge into organizational procedures. The communication of individual learning to others in the organization is also necessary for the organization to mobilize around its goals and strategy for pursuing these goals. Such communication is perhaps more challenging for Western organizations than Japanese or other Eastern organizations. In the latter, learning experiences and the sharing of knowledge are more integrated into the organizational routine (Nonaka and Takeuchi 1995).

The Nature of Data, Information, Knowledge, and Learning The conceptualization of knowledge, long discussed by philosophers, has enjoyed renewed interest since researchers have taken seriously the resource-based view of the firm (Barney 1996; Barney, Wright, and Ketchen 2001; Penrose 1959;) and have recently proposed that knowledge is a key resource for the firm (Grant 1996). The traditional view of knowledge is that it fits into a hierarchical model: Knowledge is at the top of a pyramid whose middle layer is information and whose lowest level is comprised of data. In this model, knowledge is an accumulation of interpreted and organized information (Davenport and Prusak 1998), and information comes from data within a context. One generally imagines a flow to this hierarchy, with “raw” data that are arranged in ways

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Cross-Cultural Perspectives on Knowledge Management that are meaningful in order to produce information, and then this information is consolidated into coherent frameworks to form knowledge. In this view, generally taken as typical (Alavi and Leidner 2001), data are precursors, or building blocks, of information and information is the source for knowledge. In this model, learning is the process by which the entity increases its awareness of context, creates meaning, and thereby is able to transform new information and experiences into knowledge. This model is consistent with the notion that a KMS is intended to support four steps of knowledge management: knowledge creation, knowledge storage and access, knowledge transfer, and knowledge application (Alavi and Leidner 2001). This model has been recognized as limiting and incomplete. Without some prior knowledge—knowledge that enables one to direct one’s attention to what is salient—it is difficult to distinguish data from noise. This suggests a reverse hierarchy, one in which knowledge is required to interpret data and create information (Tuomi 1999). Such a reverse hierarchical model emphasizes that an entity does not simply begin with an empty store of knowledge and build up a knowledge base, but rather it starts with a foundation of prior knowledge. Perhaps the most meaningful conceptual framework within which to view the relationships among learning, knowledge, information, and data is to visualize a hermeneutic, recursive process in which each is enriched and made meaningful by a consideration of the others. Discerning data from noise necessitates a prior knowledge framework that anticipates possible signals. Given such a framework, data can be interpreted to create meaning and resolve questions (information) and thus the entity learns. Information is the basis of communication between and among entities that can agree on interpretations and abstract concepts that can be the basis for new knowledge, which in turn can help recognize and interpret new data. At the same time, multiple schemata may be applied to develop alternative interpretations of data, providing for the construction of different meanings. One learns by using prior experience to continually select and sort signals from the environment, interpreting these signals (data) so that the new information can be incorporated in a way that enables the entity to make sense of both prior knowledge and new information. In considering this recursive model, the purposes of an organizational KMS have been articulated as contributing to three critical organizational processes (Choo 1998): 1. Sense making (understanding and interpreting data about the environment) 2. New knowledge creation (thus improving all organizational processes) 3. Decision making (applying the knowledge to affect the environment).

Systems of knowledge management for a particular organization may focus on one or more of these goals. However, the recursive nature of data, information, and knowledge demonstrates the inadequacy of simple models that would create knowledge from information and information from data. This recursive aspect also suggests multiple roles for a KMS and suggests that an effective KMS enables both individual and organizational learning through the creation of meaning and significance from the interactions of (prior) knowledge schema, (new) data, and (flows of) information. This viewpoint emphasizes the internal processes of organizational sense making and knowledge creation. In addition to the internal processes, the organization is engaged in a recursive information exchange with its environment. This exchange also affects the

Culture organization’s sense making, particularly helping the organization to understand the external values within which it is operating. This discussion suggests that knowledge can be viewed in two ways, and neither is adequate by itself. Knowledge can be viewed as a store of accumulated and interpreted information, but it also can be viewed as a social process by which individuals and organizations continually apprehend and make sense of information based on prior knowledge. The recursive aspect of knowledge and learning means that the stored knowledge affects how the individual (entity) screens and interprets flows of information. Learning—the process of understanding, interpreting, and representing new information and new experiences so that this stored knowledge can be changed or reinforced—is thus affected by the existing knowledge. This suggests an initial postulate on which we might build a framework for a culturally sensitive KMS: P1: An effective KMS not only enables an organization to store knowledge, it enables flows of data and information among its members and supports them in interpreting and representing these data and information and thus enables them to create new knowledge by considering multiple interpretations of new data using alternative schema.

Dimensions of Knowledge: Explicit and Tacit Today, the concepts of tacit and explicit have been explored in much of the writing about knowledge management and knowledge creation. Discussing and communicating about the explicit dimension is straightforward, and there is little controversy about it. The explicit dimension of knowledge is expressed in words and can be communicated to others using language, diagrams, or other tangible artifacts. Consequently, the information technology infrastructure of a KMS will typically have a knowledge base containing text, tables, models, and other information that can be expressed explicitly. However, much of what has been written with respect to the tacit dimension has misunderstood and misinterpreted Polanyi’s phrase, “we know more than we can tell” (Polanyi 1967, 4). Particularly, many have interpreted this to mean that knowledge is of two types: tacit and explicit. In taking this approach, some of the more popular writers on knowledge management have suggested transformations from one type to another (Nonaka and Takeuchi 1995; von Krogh, Ichijo, and Nonaka 2000). However, Polanyi was clear in his view that all knowledge comprises a tacit dimension; he does not discuss a tacit type of knowledge, only a dimension of knowledge that one is unable to articulate. Nonetheless, the notion of two types of knowledge is widespread and underlies much of the literature on knowledge management. A recent review of several dozen papers indicates that about 90 percent of them refer to two types of knowledge (Keane and Mason 2006). This emphasis on types rather than dimensions means that the holistic and integrated aspect of knowledge has not been studied sufficiently. It is no surprise that those who construct KMSs, without a research foundation on which to build, have inadequately accounted for the tacit dimension in their designs. The tacit dimension may represent physical skills, such as riding a bicycle, but it also reflects concepts of values and facts that are commonly known (sometimes referred

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Cross-Cultural Perspectives on Knowledge Management to as common sense) to a society or group. These commonly known values and facts are socially constructed and transmitted, as through apprenticeships (learning from a few masters) and through the broader cultural environment. The cultural environment, whether national or ethnic, contributes to an individual’s tacit dimension of knowledge and aspects of this dimension and may be difficult to change (Hall 1990). If one considers that one objective of a KMS is to enable individuals to have access to the widest range of available knowledge, it should provide for access to the tacit as well as the explicit dimension of knowledge. This leads to our next postulate: P2: For a KMS to be effective across multiple cultures, it should recognize both dimensions of knowledge and enable access and transfer of the entirety of knowledge held by the organization’s members.

CULTURE AND LEARNING Culture has been defined as “the system of shared beliefs, values, customs, behaviors, and artifacts that the members of society use to cope with their world and with one another, and that are transmitted from generation to generation through learning” (Bates and Plog 1990, 7). Culture is both individual (it is manifested as individual traits that are learned) and collective (it emerges over time from the shaping of behavior and practices through the combined efforts of a society). The importance of culture to learning can hardly be overstated. This chapter opens with the quote from Hall (1990, 47) on the relationship between learning and culture. Vygotsky, Rieber, and Carton (1987) proposed that learning can best be understood by taking an explicit culture-centered approach. Others have agreed with this perspective and developed the culture-centered approach further (Forman, Minick, and Stone 1993; Kozulin 1998). This perspective posits that culture (the collective) is a source of differences in cognition as (individual) cognitive processes are formed through sociocultural activities. Cole (1971) and others developed a contextual theory of cognitive functions, which posits that different cultures have different systems of mediated learning experiences (MLEs). Such systems and the resulting MLEs are important to cognitive development, thus leading to differences that become evident when a learner makes a transition from one system to another. A recent book focuses on the different cognitive processes between Asian thought and Western thought (Nisbett 2003). The book is filled with examples of how Asians and Westerners think differently. For example, when asked about themselves, Asians see themselves as part of a group and Westerners see themselves as individuals. Similarly, when viewing a picture of an object in the physical environment, Asians see the object in context and in relationship to the environment; Westerners perceive it more as a separate object and do not refer to the context in describing it. Nisbett outlines a conceptual model of how meaning is constructed by someone who has grown up in a particular culture. In this model, social structure (e.g., family and family relationships) is an antecedent to attention processes, metaphysics (including “folk metaphysics)” and epistemology (2003, 33). In other words, according to this model, the social structure in which one grows up affects (or effects) how one makes sense of the world and how one knows what one knows. It is significant that the differences

Culture Nisbett notes are not simply differences in a factual knowledge base but are differences in cognitive structure and, more basically, how these structures are formed: In other words, there are differences in how an individual learns and makes sense of new experiences. The evidence for a cultural difference in perception and cognition has been raised before by comparative linguists. The Sapir-Whorf hypothesis posits that language is associated with how people perceive the world. Although individuals can find a word in their native language that will correspond to each object they perceive in the physical world, their language directs attention to different aspects of the physical world and enables them to perceive (and communicate) relationships between and among these physical objects. The perceived relationships differ depending on the language (Whorf and Carroll 1956). This language-directed attention, which begins very early in a child’s life (Kuhl 2001), shapes how the child learns and consequentially affects learning later in life. In his study of young adults, Kozulin (1998) found that individuals who grew up in one culture and were engaged in learning tasks in another culture had specific learning difficulties. The difficulties were associated with coding schemata, concepts, and graphic and symbolic devices used in communication of ideas (e.g., tables, ordering, plans, maps). The difficulties extended to cognitive activities such as the ability to identify or define problems (the ability to apply already acquired knowledge to a set of data and infer the implicit question or issue that needed to be resolved) and the ability to work with multiple sources of information. In short, because of the cultural environment (and the accompanying learning that was associated with this environment), the young adults were missing cognitive antecedents that would enable them to excel in their new environment. Kozulin concluded, “Cross-cultural differences in cognition are most probably related to learning practices characteristic of different cultures and subcultures,” and “two major determinants of cognitive prerequisites are conceptual literacy and facility with other symbolic psychological tools, and a mediated learning experience responsible for the integration of these tools into the cognitive system of the student” (1998, 129). Kozulin’s research went further and showed that intervention could help the learners develop the basic skills and concepts that would enable them to learn effectively in the new environment. There is a neurological basis for these differences in epistemology and in how these differences evolve. Some of the most relevant research on this topic is interdisciplinary, work that engages neuroscientists, cultural anthropologists, language psychologists, and learning theorists (Kuhl 2001), and this work continues to contribute to our understanding of how the mind develops. At the time of birth, a baby has roughly the same number of neurons (brain cells) in its brain as an adult—about 100 billion. However, there are only about 50 trillion synapses, or connections among these neurons. In the first three years, the number of synapses grows twentyfold, to one quadrillion. Synapses are potential learning pathways, so this explosion of connectivity within the brain in the early years equips the child to learn from the range of new stimuli that the child experiences in these early years. The “brain as sponge” metaphor has been used; others describe “the scientist in the crib” (Gopnik, Meltzoff, and Kuhl 2001) because of the child’s exploration of the world and the discovery of new facts.

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Cross-Cultural Perspectives on Knowledge Management Even before the maximum number of synapses is reached around age three, the child is observing the surrounding environment and beginning to selectively sort out different stimuli. Studies of infants show that at about 7 months, children give equal attention to changes in sound regardless of the language. However, by the age of 11 months, the infants already are beginning to be selective about which sounds are different and interesting. For example, at the age of 7 months, Japanese and American infants are equally perceptive of the differences between the sounds of /ra/ and /la/, sounds that are easily distinguished in English but more difficult for Japanese speakers. At 11 months, the infants in an English learning environment have improved their perception of the difference between the sounds, but the infants in a Japanese learning environment have lost some of their ability to perceive the difference in sounds. A similar study with American and Taiwanese infants, using sounds in Mandarin, showed a similar tendency, with the Taiwanese infants improving their ability to distinguish the Chinese sound and the American infants decreasing in their ability to make the distinction. In summary, in both cases, infants demonstrated a significant increase in native-language phonetic perception and a decrease in foreign-language phonetic perception over this short period of time (Kuhl 2001). These infant studies suggest the importance of early cultural environment to learning. Learning begins by making distinctions, seeing differences in the environment, and using these differences to interpret and remember experiences. The explosive period of synapse growth provides the infant with many opportunities to learn—everything from how to walk and interact with the physical environment to communicating with others in the environment. However, the growth of synapses slows quickly, and the number of synapses remains about the same from age three until the child is about eight years old. At this point, the number begins to be “pruned” in order for the remaining paths to be reinforced and become more efficient. From birth to the age of eight, the brain is being programmed to learn—in a computer analogy, the brain is being “wired” to learn in a particular way (Kuhl 2001, 2002). This programming determines fundamental perceptual and cognitive frames or schemata that are used thereafter to interpret and learn from experience, and these schemata have substantial staying power. As noted in an online encyclopedia of religion, “the Jesuit maxim, ‘Give us a child until [s]he’s seven, and [s]he’s ours forever,’ has been quoted until it is a cliché, but that is because experience seems to suggest it is true” (Bailey 1998). This early development of learning abilities shapes the perception and interpretation of experiences throughout a person’s life. It has been acknowledged for some time that knowledge and its acquisition is path dependent (Hayek 1952; Kelly 1955), but the recent advances in neurobiology are providing a better look at how this path dependency arises. The relationship between and among culture, learning, and personal knowledge suggests that knowledge management techniques that are appropriate in one culture may not be effective for organizations that comprise members from multiple cultures or organizations that seek to serve multiple cultures. A global organization that seeks to tap into the knowledge of all its members would benefit from understanding that the knowledge embedded in members from different cultures may have different structures (schemata), and individuals who can benefit from having access to this knowledge may

Culture have difficulty in accessing this knowledge without intervention. This suggests two other propositions: P3: For a KMS to encompass knowledge by individuals from different cultures, it should provide for multiple schemata by which the knowledge can be organized and structured in the individuals’ native formats. P4: If a KMS is to be effective for learning by individuals with different cultural backgrounds, it should either (a) have culturally sensitive access mechanisms or (b) provide for skillbuilding that enables acquisition of knowledge classified and structured in non-native formats.

The preceding discussion shows the limitations of KMSs for global organizations, and the propositions provide guidance for the characteristics that a more culturally encompassing KMS might exhibit. What appears to be required is a different way of thinking about knowledge management in an organization that seeks to combine different cultures. The following discussion proposes one such approach: thinking of the knowledge management task as one of boundary spanning across cultures. The discussion draws on earlier articles that discuss this approach to thinking about designs for KMSs and digital libraries that seek to serve multiple cultures (Mason 2003, 2005).

A BOUNDARY SPANNING MODEL FOR KNOWLEDGE MANAGEMENT IN MULTICULTURAL ORGANIZATIONS Boundary spanning has been recognized as a necessary component in processes that require coordination and translations among diverse groups (Star and Greisemer 1989) and different functional groups, or “thought worlds” (Dougherty 1992). Carlile’s (2002) study of boundary spanning objects in a new product development (NPD) process suggests a useful framework for examining the functions of KMSs. Carlile’s ethnographic study of teams performing four primary functions in the creation of a new product (sales/marketing, design engineering, manufacturing engineering, and production) identified the difficulties of communication and coordination of the different knowledge and value systems represented by the team members. He examined how the teams worked together and how the team dealt with the specialized knowledge of each area. Each of the four functional areas had localized and embedded knowledge, structured in a way that made sense to that area, much as we envision the localized and embedded knowledge of a culture. This knowledge specialization presented a barrier to the effective operation of the NPD team—the team found it difficult to exchange and synthesize knowledge as necessary for the successful development of a new product. Carlile observed that the team overcame this barrier by using boundary spanning objects that operated at three different levels: syntactic, semantic, and pragmatic. At the syntactic level, shared repositories enabled communication of facts and agreedupon tasks and actions. At the semantic level, standardized forms and methods enabled not only communication of facts but also provided a way for the different groups to clarify differences in meaning. The objects at this semantic level (standard forms and methods) enabled the team to translate the localized knowledge embedded in one group into forms that other groups could understand. At the pragmatic level, objectives, maps,

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Cross-Cultural Perspectives on Knowledge Management and models enabled each group to transform embedded knowledge into knowledge that the entire team (and others not in the group) could understand. In earlier studies of communities, Brown and Duguid (1998) pointed out the roles of boundary spanning activities and noted particularly the need for translators between communities. In commenting on Carlile’s model, Brown (2002) suggests that Carlile’s three levels correspond to three different levels of knowledge ambiguity among communities of practice. At each level, different types of boundary objects are necessary for communication, knowledge transfer, and learning. At the syntactic level, the differences across the boundaries are explicit, clear, and stable. A shared syntax is a necessary (but not necessarily sufficient) condition for sharing knowledge under these conditions. Taxonomies and classification (e.g., shared databases) provide this syntax and enable the sharing and transfer of knowledge among groups that have a clear understanding of their differences and understand that these differences are relatively stable. For a multicultural organization, this condition might be represented by an organization that has been relatively stable over time, so that the different cultures within the organization have a clear understanding of their differences. Under these conditions of explicit and clear differences, this syntactic level is a necessary condition for knowledge sharing in a multicultural organization. Agreements on syntax are required for data to be exchanged between cultures and communities. As a minimum, agreements at this syntactic level deal with technical standards and data architecture. Although data can be shared at this level, as Carlile and Brown both note, the sharing of data is insufficient for the exchange of knowledge and learning. At the semantic level, the differences across the boundaries may be neither clear nor stable (Brown 2002). The solution to spanning the boundary at this level requires a method of translating meanings across boundaries. At this level, Carlile (2002) observed the use of standardized forms and methods as boundary objects. For a KMS in an organization that comprises, or seeks to serve, multiple cultures, this semantic level is an additional necessary, but insufficient, prerequisite for knowledge sharing. For groups that have similar cultures, in which concepts are similarly named and relationships among concepts are similar, relatively simple translations that involve mapping of concepts from one language or mental model to another may be sufficient. In some cases, the models may need to be dynamic and agile. For example, if the technology for exchanging information between groups is critical to an exchange (e.g., as in a technology transfer), or if technology is the focus for exchanging knowledge, the dynamic nature of technology may require the models employed in the exchange to be agile and to enable interpretation of flexible and evolving concepts. Even more difficulty may be expected if the different cultures are experiencing different rates of progress. In such situations—and any situation in which the differences are neither clear nor stable—frequent communication between the groups may be necessary to assure currency in meaning and to assure that new concepts are absorbed by both groups. At the semantic level, if there has been agreement at the syntactic level, and there is the basis for a shared communication language, metaphors may be a useful approach to communicating new ideas (Lakoff and Johnson 1980), if such metaphors can be apprehended by both cultures. For groups that have more distinct cultures, with few shared concepts, such translations or mappings may not be feasible without additional explorations at the pragmatic level. Indeed, even the metaphorical concept of a library, widely used in most Western cultures, may not be shared across some cultural boundaries (Duncker 2002).

Culture The pragmatic level provides a level for exploring other differences across boundaries. However, explorations at this level require some degree of agreement at the other two levels. In his discussion of this model, Brown (2002) notes that the knowledge of one group is not neutral to the knowledge of another group or community. Different communities may have different values and/or power relationships, and this level of difference requires boundary objects that provide additional capability beyond the first two levels. At the pragmatic level, the groups must transform their knowledge and create new (shared) knowledge rather than simply exchanging or transferring knowledge. Resolution of group differences requires objects such as models and maps, objects that enable the surfacing of assumptions, tacit knowledge, and values. At this level, shared syntax and meaning must be sufficient to permit the sharing of methods of thinking and the development of a shared basis for understanding each group’s values and mental schemata. It is at this stage that intervention, perhaps by someone who has experience with both cultures, may be necessary. In this model of boundary spanning, the lower two levels are necessary but insufficient for complete sharing of knowledge and the development of mutual understandings that would enable the creation of new knowledge. The mutual understandings and the associated trust that comes from these understandings may be necessary if a KMS is to support an organization comprising users from multiple cultures. This suggests a fifth proposition: P5: For a KMS to be effective in a multicultural organization, it should provide boundary spanning mechanisms and processes at the syntactic, semantic, and pragmatic levels.

Mechanisms and processes at the syntactic and semantic levels of this model are readily apparent in observations of commercially based KMSs implemented at individual organizations, but corresponding processes at the pragmatic level are rare. The few cases in which such pragmatic level processes were reported noted the use of face-to-face meetings and structured forums in which distinct groups discussed values and differences. Some incentives and standards, designed to transform the executive level goals and values (e.g., the use of the KMS) into practice at the operational level of the firm, were judged to be pragmatic boundary spanning activities in which the boundary was hierarchical rather than a national, cultural, or ethnic (Mason 2003). Access to all the knowledge available within an organization is constrained when a KMS does not explicitly plan for the inclusion of multiple cultures in the creation, storage, and transfer of knowledge. A KMS designed by and for a particular organizational culture by its nature restricts the range of schemata by which knowledge is classified and stored, and thus the creation of new knowledge is limited to discussions within the meta framework provided by the collective combination of these schema.

CONCLUSION AND DISCUSSION Prior work in KMSs has not been sensitive to either the value of knowledge that may be embedded and localized in different cultural groups or to ways in which this knowledge might be made accessible. This lack of sensitivity means that global organizations, organizations that seek to make use of the knowledge of all their members and that seek to serve multiple external clients, are inadequately prepared to do so with current models and implementations of KMSs. The theoretical goals of KMSs—to enable access to the

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Cross-Cultural Perspectives on Knowledge Management widest range of knowledge and to provide the capability to create new knowledge from existing knowledge—are not being realized in today’s global organizations. Recent interdisciplinary research involving neuroscientists, cultural anthropologists, language psychologists, and learning theorists has contributed to our understanding of how the mind develops. This work has provided evidence for the opening quote from Hall that emphasizes the cultural dimension of learning and knowledge creation. The early cultural environment affects the wiring of the brain so that later learning is shaped and guided by these native cultural experiences. If organizations are to benefit from the recent understanding of brain development and are to create KMSs that support global efforts and enable knowledge creation and exchange among multiple cultures within the organization, new approaches are required. One approach is to consider distinct cultures as different learning communities and to think of a KMS as a boundary-spanning process. This chapter suggests that the three-level boundary-spanning model proposed by Carlile can help guide the development of mechanisms for incorporating different cultures in an organizational KMS. Each level presents different challenges. The syntactic and semantic levels are more easily amenable to the application of current information technologies. However, these are simply necessary levels and are not sufficient for a multicultural KMS. Completing the model requires these levels to be used to work at the third (pragmatic) level of the model. It is at this level that the culturally specific tacit dimension of knowledge may be reflected, and it is at this level that the organization that seeks to encompass multiple cultures must provide social mechanisms by which the issues of different values can power can be negotiated. Only then can a global organization unlock the knowledge embedded in its culturally diverse members and realize the original vision of a KMS that enables ready access to the full range of knowledge within the organization’s boundaries.

REFERENCES Alavi, M., and D. E. Leidner. 2001. Review: Knowledge management and knowledge management systems: Conceptual foundations and research issues. MIS Quarterly 25 (1): 107–36. Bailey, E. I. 1998. Religious education. In Encyclopedia of religion and society, ed. J. W. H. Swatos. Walnut Creek, CA: AltaMira Press, http://hirr.hartsem.edu/ency/ReligiousE.htm. Barney, J. B. 1996. The resource-based theory of the firm. Organization Science 7 (5): 469. Barney, J., M. Wright, and D. J. Ketchen Jr. 2001. The resource-based view of the firm: Ten years after 1991. Journal of Management 27 (6): 625–41. Bates, D. G., and F. Plog. 1990. Cultural anthropology . New York: McGraw-Hill. Brown, J. S. 2002. An epistemological perspective on organizations and innovations. Paper presented at the Organizational Knowledge and Learning Conference, Athens, Greece. Brown, J. S., and P. Duguid. 1998. Organizing knowledge. California Management Review 40 (1): 90–111. Carlile, P. R. 2002. A pragmatic view of knowledge and boundaries: Boundary objects in new product development. Organization Science 13 (4): 442–55. Choo, C. W. 1998. The knowing organization. New York: Oxford University Press. Cole, M. 1971. The cultural context of learning and thinking: An exploration in experimental anthropology. New York: Basic Books. Davenport, T. H., and L. Prusak 1998. Working knowledge: How organizations manage what they know. Boston: Harvard Business School Press.

Culture Dougherty, D. 1992. Interpretive barriers to successful product innovation in large firms. Organization Science 3 (2): 179–202. Duncker, E. 2002. Cross-cultural usability of the library metaphor. International Conference on Digital Libraries archive. Proceedings of the 2nd ACM/IEEE-CS Joint Conference on Digital Libraries Portland, 233–40. New York: ACM Press. Forman, E. A., N. Minick, and C. A. Stone. 1993. Contexts for learning: Sociocultural dynamics in children’s development. New York: Oxford University Press. Gopnik, A., A. N. Meltzoff, and P. K. Kuhl. 2001. The scientist in the crib: What early learning tells us about the mind. New York: Perennial. Grant, R. M. 1996. Toward a knowledge-based theory of the firm. Strategic Management Journal 17 (Winter): 109–22. Hall, E. T. 1990. The silent language. New York: Anchor Books/Doubleday. Hayek, F. A. v. 1952. The sensory order: An inquiry into the foundations of theoretical psychology. Chicago: University of Chicago Press. Huber, G. 1991. Organizational learning: The contributing processes and literatures. Organization Science 2 (1): 88–115. Keane, B. T., and R. M. Mason 2006. On the nature of knowledge: Rethinking popular assumptions. Hawaii International Conference on System Sciences, Kauai, Hawaii. CD-ROM. Los Alamitos, CA: Computer Society Press of the IEEE. Kelly, G. A. 1955. The psychology of personal constructs. New York: Norton. Kozulin, A. 1998. Psychological tools: A sociocultural approach to education. Cambridge, MA: Harvard University Press. Kuhl, P. K. 2002. Born to learn: Language, reading, and the brain of the child. Early Learning Summit for the Northwest Region, Boise, Idaho, http://www.ed.gov/teachers/how/early/ earlylearnsummit02/kuhl.doc. Kuhl, P. K., F. M. Tsao, H. M. Liu, Y. Zhang, and B. De Boer. 2001. Language/culture/mind/brain: Progress at the margins between disciplines. Annals of the New York Academy of Science 935: 136–74. Lakoff, G., and M. Johnson 1980. Metaphors we live by. Chicago: University of Chicago Press. Mason, R. M. 2003. Culture-free or culture-bound? A boundary spanning perspective on learning in knowledge management systems. Journal of Global Information Management 11 (4): 20–36. ———. 2005. The critical role of librarian/information officer as boundary spanner across cultures: Humans as essential components in global digital libraries. World Library and Information Congress: 71st IFLA General Conference and Council, Oslo. The Hague: International Federation of Library Associations, http://www.ifla.org/IV/ifla71/papers/013e-Mason. pdf. Nisbett, R. E. 2003. The geography of thought: How Asians and Westerners think differently—and why. New York: Free Press. Nonaka, I., and H. Takeuchi 1995. The knowledge-creating company. New York: Oxford University Press. Penrose, E. T. 1959. The theory of the growth of the firm. Oxford: Blackwell. Polanyi, M. 1967. The tacit dimension. Garden City, NY: Anchor Books. Ponzi, L, and Koenig, M. 2002. Knowledge management: another management fad? Information Research 8 (1), paper no. 145, http://InformationR.net/ir/8–1/paper145.html. Star, S. L., and J. R. Greisemer 1989. Institutional ecology, “translations” and boundary objects: Amateurs and professionals in Berkeley’s Museum of Vertebrate Zoology, 1907–39. Social Studies in Science 19: 387–420. Stata, R. 1989. Organizational learning: The key to management innovation. Sloan Management Review 30 (3): 63–74.

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Cross-Cultural Perspectives on Knowledge Management Tuomi, I. 1999. Data is more than knowledge: Implications of the reversed knowledge hierarchy for knowledge management and organizational memory. Journal of Management Information Systems 16 (3): 103. von Krogh, G., K. Ichijo, and I. Nonaka. 2000. Enabling knowledge creation. New York: Oxford University Press. Vygotsky, L. S., R. W. Rieber, and A. Carton. 1987. The collected works of L.S. Vygotsky. New York: Plenum Press. Whorf, B. L., and J. B. Carroll. 1956. Language, thought, and reality: Selected writings. Cambridge, MA: Technology Press of Massachusetts Institute of Technology.

3 The Art of Systems: The CognitiveAesthetic Culture of Portal Cities and the Development of Meta-Cultural Advanced Knowledge Economies Peter Murphy

ABSTRACT Knowledge economies are the most powerful economies in the world. What makes them possible? This article discusses the origin of knowledge in pattern thinking and the source of pattern thinking in aesthetic forms. In addition, the author notes the concentration of knowledge economies in specific geographic zones—in portal city regions. These various phenomena are confluent. The art cultures of portal cities, and their intense concentrations of designing intelligence, contribute to the long-term accumulation of knowledge in these places. There is a strong parallelism between aesthetic culture and the demands of long-distance portal economies. Aesthetic form lends itself to the management of uncertainty—it facilitates the discovery of pattern in the midst of chaos. At the same time, powerful economies arise out of the same kind of ability to manage high levels of contingency and risk. The city is the most potent point of intersection of these various capacities. Arts-and-science cities, also normally portal cities, self-organize through mimetic aesthetic forms to meet these challenges. Portal cities, characterized by high levels of import and export, are among the most proficient users of pattern forms to manage data flows. Firms and organizations, where the management of knowledge occurs, mirror this. Successful firms and organizations deal with the continuous influx of information generated by contingency. They use pattern thinking and designing intelligence to make sense of those information flows and to obviate the risks inherent in operating in environments that are characterized by high levels of uncertainty and rapid shifts in direction.

INTRODUCTION There are two ideas of culture. One is romantic (Murphy and Roberts 2004): Culture in the romantic sense is a function of nations. Nations are defined by territory, language,

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Cross-Cultural Perspectives on Knowledge Management and social norms. Nations possess incommensurable characteristics—different ways of doing things and creating things, and different mind-sets, that provide advantages in global economic and social competition. In particular, the “genius” of a nation produces innovation. A second, and older, idea of culture equates culture with the civilization of cities. This idea precedes the modern romantic idea of nationhood. Culture as a function of the civilization of cities is less the expression of incommensurable qualities and habits and is more the consequence of the universals of shape, pattern, and form. These are universals in the sense of their reach. They can be understood irrespective of nationality, and acquired and stored as knowledge, they can be widely imitated and are applicable in many domains. A little like nations, however, this kind of pattern knowledge does not emerge just anywhere. Nor is it most potently applied just anywhere. Its natural ecology is the city, especially as we indicate subsequently, the porous environment of great portal cities. Portal cites combine busy ports (sea, land, and rail ports) with large metropolises. They are characterized by intensive import and export of goods, money, people, and information. Despite the importance of modern rail, road, and air transport, most successful portal cities are still located on coasts and rivers. The emergence of pattern knowledge is closely associated with the aesthetics of these littoral cities and the high-quality design cultures that such cities invariably produce. In the second model of culture, then, it is the art, design, power, and beauty of cities that produces innovation. Japan exemplifies the two meanings of culture. It has a strong, easy-to-recognize set of national characteristics. The Japanese way of doing things is often used to explain the wealth of Japan’s economy. But, long before Europe, archipelagic Japan was a highly urbanized society that had a refined aesthetic culture and that relied on the intensive importation of knowledge even when, from a national perspective, Japan was “closed” to the world. Today the 41 universities of Kyoto, and its huge industrial research park infrastructure, owe considerably more to the urban culture of art and knowledge than they do to the national difference of Japan. This is especially so at the sociocultural level of fundamental far-reaching innovation. National culture has a significant role in the identity formation of linguistic or territorial groups. Yet, as an innovation driver—a shaper of technological, economic, and social forms with a high propensity for export— national difference is much less significant. The largest part of human innovation has for the longest time been tied to the culture of cities.

THE ART OF SYSTEMS The particular significance of all of this is that, although the human species has always on some level innovated, in the past 200 years, innovation has become a core economic and social force. What we have come more recently to call the knowledge economy is simply a reflex of this. Knowledge, it must be emphasized, is not per se innovative. Mostly knowledge is something that is secondhand: It passes from one person to another. Yet, sometimes, the act of knowledge produces something new—something unheard of or something unprecedented. Newness is not such an important quality in itself. Where it is important is where knowledge that is new produces something that gives shape to the world. This kind of knowledge patterns what we make and how we manage, what we say and how we feel, what we do and how we behave in the world. Let

The Art of Systems us call this formative knowledge or pattern knowledge. The amount and the influence of this kind of knowledge have grown sharply in the past 200 years. Usually, it begins obscurely enough and normally in some domain of art or science. What is impressive is how quickly pattern knowledge now moves from the quieter corridors of the arts and sciences into the bustling thoroughfares of the wider society. One of the reasons for this is that a large number of modern institutions—ranging from corporations to governments—routinely absorb and apply, utilize and spread, promote and develop new knowledge (Heller 1985). Another reason is the growth of self-organizing systems in the modern world. Observing and mimicking patterns is a human trait. The mimetic power of social systems and information systems in the modern world has expanded significantly. Since the Industrial Revolution, economy activity based on applied science and applied art has grown at an enormous rate. Governance based on the social sciences and cultural industries based on the humanities have expanded in tandem. Modern institutions—ranging from manufacturing corporations to government departments to film studios—have become adept at modeling and restructuring using pattern knowledge. Despite this, our “knowledge of knowledge” remains elusive. It is a far trickier question to explain how pattern knowledge emerges than to describe its impact on economic behavior and social organization. The classic philosopher’s paradox—that knowledge is ignorance—indicates just how difficult it can be to precisely answer the question “What is knowledge?” One of the oldest confusions is to equate knowledge with opinion. We still do this, and we do it alongside all of the newer idols of knowledge we have invented, not least the idea that the accumulation of information is the same as knowing things. The fallacy of equating knowledge and information is illustrated by a very simple example. Stock investors who ignore the financial news and who pay attention solely to profit and loss results make better investment decisions (Surowiecki 2004). The opinions of pundits and the 24/7 flow of information get in the way of making good financial judgments. So often, in the case of knowledge, less is more. Knowledge is always economical. There is a good reason why this is so. Knowledge—as opposed to opinion, expression, or information— fixes on the form or shape of things. Knowledge is a function of system or architectonic arrangement. Knowledge is intimately connected to the art of systems, the art of how things are systematically arranged so as to be most pleasing, useful, efficient, economical, just, inspiring, or moving. Knowledge is the comprehension of form. Information, opinion, and expression are often superfluous to the essentials of form. They just get in the way. Considered as a unified field, then, knowledge is aesthetic. Knowledge, in the strongest sense, is the aesthetic or art of systems. Self-reflexive accounts of high-level knowledge creation tend to conclude on a very repetitive note: Knowledge begins with an image. It starts with the intuition of an image, a shape—a sketch of something in the mind. The aesthetic quality or art of systems cuts across economy and emotions, work and entertainment, politics and imagination. It is common across all of the compartments and spheres of human action and cognition. Thus, to know something is also to know how to arrange something or how something is arranged. Aesthetic qualities, we must always remember, are not simply social phenomena. The art of systems plays its role in the formation of societies and economies. But systemic aesthetic qualities are also pervasive in the physical and biological domain as well. Characteristics like symmetry are built into the fabric of the universe (Greene 2004). It is unsurprising, then,

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Cross-Cultural Perspectives on Knowledge Management that knowledge economies are functions of both the arts and the sciences. Beauty is to be found in self, society, and nature. Knowledge, in the sense of the art of systems, is knowledge of the commons. It is, at its root, the mind’s grasp of the common forms or common morphologies of self, society, and nature. The aesthetic or art of systems may be explicit or tacit. We can explain “what” we know, but more often we rely on inarticulate assumptions of knowing “how” to do something. Knowledge breakthroughs usually make what is inexplicit explicit. We give an account of what we know. But most knowledge remains implicit in the structures or systems we build or that we discover around us. In the most advanced economies and societies, we are surrounded by ever-deepening layers of knowledge embedded in complex systems. Yet we do not very often read a manual to make sense of a software system, any more than we read a travel guide to make sense of a city. We buy these code books for reassurance, but in practice our deepest knowledge comes through reconnaissance and navigation of these systems as we identify their aesthetic or systemic properties, and match them with our intuitions of the same. Knowledge in the sense of the aesthetic ordering or art of systems is not, and has never been, equally distributed across the face of the earth. There are knowledge clusters: there are knowledge-rich societies and knowledge-poor societies. Some economies interpolate high levels of systems knowledge; others exist literally hand-to-mouth. The explanation of why this is so is, at least partially, a function of place. In certain definable places, knowledge concentrates, which also means that in these places high-level aesthetic regimes emerge. The chief nodal points in which knowledge concentrates are portal cities and sea regions. The powerhouse examples of portal societies or portal regions in history are to be found around the Mediterranean (e.g., ancient Greece, Renaissance Florence and Venice), the North Sea (e.g., the Low Countries, southern England since the Renaissance, and the Scottish Lowlands in the eighteenth and nineteenth centuries), the seaboards and Great Lakes of North America since the sixteenth century, and the China Seas in the nineteenth and twentieth centuries. Adding to these maritime regions the inland peninsulas of Europe—especially the Île-de-France and the triangular regions bounded by the Elbe and Salle Rivers, the Maas and Rhine Rivers, and the Rhine and Danube Rivers—we find that these societies, in their golden epochs, are responsible for most of the human species’ towering artistic, literary, political, economic, scientific, and technological inventiveness. In the cases of post-1400 Europe and post-1800 North America, this intellectual geography is vividly mapped by Murray (2003, 301–6). Unsurprisingly, then, portal regions have also emerged as the principal incubators of modern kinds of intellectual capital (Murphy 2005a). Advanced economies over the past 150 years have put great effort into transforming tacit knowledge into explicit knowledge and turning explicit knowledge into forms of intellectual property, especially patents and copyrights (Howkins 2001). Intellectual property, like generic knowledge, clusters in littoral, insular, peninsula, and riverine zones, regions, and states. This recent history echoes deeper patterns in the distribution of knowledge. Scattered step-like across the past 2,500 years of human history, there have appeared a series of geographical regions distinguished by exceptionally high levels of intellectual innovation and the ability to use this groundbreaking capacity to generate economic wealth, social prosperity, and geopolitical influence. Each of these regions has been characterized by two or more ‘world cities’ that mirror each other, a maritime or riverine geography, and

The Art of Systems a precocious ability to trade, communicate, and project themselves over long distances. Each region has developed a portal character; that is to say, each is an intensive importer and exporter of one or more of the following: goods, money, people, or information. A condition of this is that each develops porous systems that complement more conventional social systems based on rules and hierarchies.

PORTAL SOCIETIES Porous systems, especially those with global reach, emerge where a society is good at encouraging designing intelligence. Portal societies are characterized by powerful cultures of design that are proficient in deploying the morphological resources of the commons. Beautiful, elegant, fair, efficient, and economic structures and processes are created by acts of design. Design represents a distinctive mode of economic and social production, distribution, and interaction. Designing intelligence finds its epitome in high-level arts and sciences. The pursuit of aesthetic beauty and mathematical elegance mirrors the pursuit of lucid laws and social fairness. A recurring characteristic of portal city regions is the creation of order by design. Order by design, a key part of the art of systems, facilitates the long-distance, cross-cultural reach of portals. To do this, it reduces the grip of rules and hierarchies in social organization in favor of aesthetic self-organization. The latter is crucial. For aesthetic self-organization stimulates tacit and explicit innovation. Beauty and its many synonyms (e.g., mathematical elegance, social symmetry) are key drivers of social reform, systems development, product creation, machine efficiency, and so on. (For a discussion of beauty’s role in machine and product development, see Gelertner 1998.)The same thing that animates social and economic creativity propels great art and science, and creates great urban centers. Here we see the underlying symmetry between designing intelligence, the historic concentration of world-class arts and sciences in portal regions, and the economic wealth and aesthetic order of their cities. Common to all is the power of beauty. Portal zones include historic cases like the fifth-century b.c.e. Aegean and Black Seas (Athens), the Renaissance Mediterranean (Venice), and the seventeenth- and eighteenth-century North Sea (London, Amsterdam, and Edinburgh). The modern age saw the development of powerful maritime city-regions in the New World, notably the pseudo-sea regions (the East Coast, Great Lakes-Hudson region, and the California coast) and littoral cities (Boston, Chicago, Detroit, Toronto, New York, and San Francisco) of North America, the urban coastal cities and “beach civilization” of Australia, and the islands of New Zealand (on the Australian case, see Murphy, 2006). The nineteenth and twentieth centuries saw the rise of the China Seas region, and the emergence there of a series of insular and peninsula societies—Japan and more recently Singapore, South Korea, and Taiwan—that have accumulated high levels of intellectual capital and have developed impressive technocratic cities. Like all other species of society and economy, portal regions include interesting cases of failure, and also of triumph over failure, such as the following: • •

The dashing of Thomas Jefferson’s hopes that the Mississippi–Gulf of Mexico–New Orleans region would become an economic powerhouse in the nineteenth century. The faltering attempts to reenergize the Mediterranean in the same century as the territorial power of the Russians and Ottomans broke the tissue of connection between

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•

•

•

the Mediterranean and Black Seas, and oceanic power finished off the Mediterranean city-states. The swallowing of the riverine city-states and principalities of Europe by French and German territorial power in the nineteenth century, and the splitting of Baltic and maritime East Asian economies by Soviet and Chinese Communist territorial power in the twentieth century. The reemergence of older portal regions—the Mediterranean (Northern Italy and Israel) after 1945; the renaissance of Black Sea and Caspian Sea zones and the reunification of the Baltic after the end of the Soviet Union, reorientating historically intellectual capital–rich coastal societies (e.g., Lithuania and Estonia) to their littoral near-neighbors (e.g., Finland); and the reemergence of the south coast of China as a powerhouse with complex relations to its insular twin, Taiwan, following the partial retreat of state socialism in China. The latter-day resurrection of the Gulf of Mexico as a major portal region structured around the Houston-Miami littoral arc, its oil-sea industries, and high-tech space industries.

The ups and downs of these long-term, large-scale processes are well-illustrated by the case of the rise and fall of the large mainland-dominated Communist states in the Soviet Union and China. The resulting capitalist-communist geopolitical bipolarity disrupted historical patterns of sea ecumenes in the Black Sea, the Mediterranean, the Caspian Sea, the Baltic Sea, and the China Seas. Since the end of the Cold War, older and arguably more powerful patterns have come back into play. Studies measuring innovative capacity (measured by expenditure on research and development and production of patents) indicate that the emergent cohort of economic innovators (those that have appeared in the period since the late 1980s) are all littoral entities bordering these old sea regions. Porter and Stern (2001) point to major gains in innovative capacity made by Denmark, Finland, Singapore, Taiwan, South Korea, and Israel. They predicted then that Ireland was in the process of joining this littoral group. It is also notable that three of the four countries (Japan, Sweden, Finland, and Germany) that have lifted their patentable level of innovative capacity consistently over the past quarter of a century are littoral states on the bounds of the Baltic or China Seas. Sharp observers have noted how with the demise of the Soviet Union “a new Hanseatic League” began to develop. This is “an emerging regional commercial trading zone, stretching as far as Hamburg and Copenhagen to the west, Oslo and Stockholm to the north.” The eastern anchor of this zone is the twin cities of Helsinki and Tallinn, located a ferry ride across the Baltic Sea (McGuire, Conant, and Theil 2002). Such twinning or mirror cities are very typical of these powerhouse sea region groupings. As in the case of Israel, Finland, and other budding innovators, at the end of the twentieth century information technologies and telecommunications have played a leading role in the reemergent zones. However, one should be careful not to overidentify formative power with any particular technology, system, or process. In all of the cases, deeper structural forces are at play. In all portal regions characterized by persistent and high levels of innovation, procedural rules and social hierarchies are (partly) displaced by aesthetic structures or tacit self-organizing forms of order. This is conditioned by the fact that portal societies are all involved in long-haul trade. Sea or riverine carriage, and long-distance trade, shapes the nature of portal regions by virtue of one telling condition: The greater the distance is, the less effective are hierarchies and rules in ordering human transactions. One of the results of this is that knowledge in the strong

The Art of Systems sense of the aesthetic or art of systems has an incipient tendency to replace hierarchies and rules under portal conditions. This has important spin-offs, one of the chief being that portal city regions are excellent milieus in which the arts and sciences develop. This helps to explain the role of the arts and sciences in the political economy of portals, and the high level of creativity often characteristic of them. A classic case of this is historic Königsburg, on the far eastern side of the Baltic. This old port and university town not only produced Immanuel Kant but also Hermann Minkowski (the geometer who provided the mathematical basis for Einstein’s theory of “spacetime”), Theodr Kaluza (whose geometry laid the foundation for string theory in physics), and Hannah Arendt (one of the two or three great political philosophers of the twentieth century). Copernicus came from the nearby port town of Frombork. Think also of cases such as fifth-century b.c.e. Athens or twentieth-century New York City. Why do these places have such a high incidence of creativity? The phenomenon can be explained in part by the dense, unsocial, and mobile nature of portal cities and their populations of strangers who lack thick social ties. Aesthetic ordering, key to creative acts, is favored under such conditions. Political context also has implications for the power of aesthetic ordering. The most crucial factor is that city-regions are not nations. To do what they do, they must operate at least to some extent outside of national-territorial procedural institutions and network systems, and equally also outside of the bureaucratic hierarchies of patrimonial states. Hong Kong’s special administrative status vis-à-vis the People’s Republic of China is a classic example of the latter. The Pearl River delta today produces 10 percent of China’s gross domestic product and 40 percent of its goods for export. This is directly a function of Hong Kong’s special—that is, “odd”—status. Portal city regions flourish where the states or legal systems that they are embedded in are odd, at least in contrast with conventional nation-states and patrimonies. Often these are states that are federations, commonwealths, or unions of states. Examples range from the seventeenth-century Dutch Republic and the United States to United Arab Emirates and its mercurial portal of Dubai. Such states are based on devolved power, divided power, or separated power. In other cases, the power of portal states is enigmatic. They rely on tacit unwritten constitutions (like Great Britain) or on a pervading sense of anonymous power (like Japan)—or else they are states that are cities (historic Venice, Singapore); states that have been divided in half (South Korea); or states that are claimed as provinces of another state (Taiwan). In some cases, portal city regions, like Japan’s KobeOsaka-Yokohama-Tokyo conurbanation, dominate the surrounding nation-state. In short, powerful portals are different. They obey the law of the state yet have a life that is quasi-independent of it. Portals, though, do not just replace one kind of law for another. What makes portals truly different is their capacity to replace social rules and hierarchies with an intuitive aesthetic order. This has enormous consequences, not least because the resulting morphology of portal city-regions typically embodies an emphatic sense of form, and this in turn encourages visual, intuitive, and pattern-style cognition that is essential for high-level creative action. Let us examine how such aesthetic order emerges.

EMERGENT FORMS When a portal city begins to act as an intermediary between its manufacturers and foreign cities or between its countryside and foreign cities, or simply between foreign cities,

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Cross-Cultural Perspectives on Knowledge Management it becomes a foreign commerce city. People bring their goods to the intermediary—to the portal—rather than trading directly because of the concentration of intelligence in the portal city. A classic example is the cotton trade in the American South before the Civil War. By 1830, 40 percent of the receipts of that trade flowed to New York City for freight, insurance, commissions, and interest (Miller 1968). This is a consequence of the fact that in any production or distribution system, organizational capacity, logistics, and inventiveness over time acquire a progressively greater role in contrast to land, labor, energy, and physical capital. Portals concentrate such capacities. Intelligence in the most general sense means the capacity to make better-than-chance choices. Portal cities are intelligence centers. Portals function as intelligence centers in a number of different ways, ranging from the simple to the complex. Let us consider briefly these four levels or stages. At the first stage, portals collect and disseminate information about prices, environmental conditions, availability of transport, assessments of political risks, maps, stories of expeditions, warnings of invasions, and so on. Such information is a response to uncertainty. The more uncertain the world, the greater is the demand and the need for information. Uncertainty creates contingency—possible or alternative ways of acting are projected in order to meet uncertain conditions. Intelligence at the second stage is the ability to think effectively about contingencies and to evaluate possibilities (what might be done), without fear or panic or irrational exuberance. Limited intelligence, typical of societies with thick cultures, assumes a more or less fixed number of alternatives. Expansive intelligence, typical of societies with thin cultures but high cognitive thresholds, encourages unconventional conceptions of what might be done. The third stage of intelligence rests on the capacity to be able to locate events, contingencies, and choices in the context of large-scale and long-range patterns and structures. Contextualization relies on pattern recognition. This requires theoria—the ability to be able to step back and think theoretically about events and contingencies, which means being able to intuit the deeper structural forces and morphologies that shape surface events and contingent situations. The fourth stage of intelligence is innovation/creation. This kind of intelligence is not to be confused with reflexive projection and evaluation of contingencies. Future thinking, involved in puzzling about contingencies, underpins adaptability to contextual change. But changing actions or the rules of action to master contingencies is not the same as fundamental creation/innovation. Fundamental creation/innovation is a function of emergent forms. The highest stage of intelligence is the capacity to give form. This is the most difficult and the most mysterious kind of intelligence. It is very powerful but rarely in evidence. It is the kind of intelligence that is called upon when social systems are threatened with chaos. This kind of intelligence creates new scientific, technological, economic, social, organizational, intellectual, and cultural forms. The creation of new forms is rare but extraordinarily important (Castoriadis 1997). Where do such forms come from? That is a difficult question to answer. But one thing is clear: portals have played an exceptional role in the history of creation. In antiquity, the Mediterranean ecumene was a generator of a remarkable array of forms. The Silk Roads–Caspian Sea ecumene was the incubator of the most vital developments in Arab

The Art of Systems and Islamic thought. The China Seas ecumene today produces the most enterprising of Asian social forms. The Baltic Sea was a driving force of commercial innovation during the European Middle Ages (Parker 2004). The Mediterranean revisited its massive formative power during the Renaissance and early modern era. The North Sea–Baltic Sea ecumene became the crucible of European and global modernity from the sixteenth through seventeenth, eighteenth, and nineteenth centuries. The greatest form-generating powerhouse in the nineteenth century was the Great Lakes–Hudson ecumene that linked Chicago and New York City. In the second half of the twentieth century, this leading role gravitated to the coastal ecumene that linked San Francisco’s Bay Area with Los Angeles and San Diego. Much of the enduring strength of the United States derives from its unprecedented command of not one or even two but of multiple portal city regions ranging from the Baltimore–Boston seaboard through the Great Lakes–Hudson region, the Californian coast, and the crossborder Seattle–Vancouver ecumene to the liquid arteries of the vast Mississippi–Gulf of Mexico–Floridian Peninsula zone. Notably, whenever one of these regions declines, another rises in its place. As the power of the post-1945 postindustrial economies of the California Coast and Puget Sound dipped around 2000, the slack was already being taken up by Florida and Texas, as flows of population and investment accelerated toward the inverted Y centered on Houston and Miami. In 2000–2005, the largest seaports in the United States were New Orleans (“South Louisiana”) and Houston. These were ranked fourth and sixth internationally—competing with Rotterdam (first), Singapore (second), Shanghai (third), and Hong Kong (fifth) (see Geohive n.d.). The election of Texas Governor George W. Bush as U.S. President in 2000 was driven by population growth in Florida and Texas. This population growth was matched by a flow of businesses from California, the dominant economy of the 1990s. (For a discussion of the export of business and people from California to Florida, see Kotkin 2005.) The signature of this shift was the growth of intellectual capital concentrations in the southern U.S. littoral relative to California or the North-East. The dynamic of portal cities is well exemplified by Chicago, on the Great Lakes (Miller 1996). In the nineteenth and early twentieth centuries, Chicago created a startling array of new economic, social, and intellectual forms, including futures trading in commodities, the modern office (based on a combination of telegraph, filing cabinet, and typewriter), the assembly line packing plant, the iron-frame skyscraper and the modern vertical city, the balloon frame for domestic housing, the mail-order business,1 modern marketing techniques (the introduction of the sale and the bargain, and active stimulation of customer trust and loyalty), the idea of the city as a conference center, and the first truly great school of American sociology (the Chicago School). Chicago also cocreated the only species of indigenous American philosophy (Pragmatism). In the twentieth century its premier university, the University of Chicago, was domicile to more than 70 Nobel Laureates, mainly in physics, chemistry, medicine, and the economic sciences. The movement from information through contingency, order, and innovation can be thought of as the life cycle of intelligence in the portal. Two additional conditions, however, are prerequisites for the concentration of intelligence in the portal, both spatial in nature. The first is topography. Portal cities typically arise in locations that are poor for agriculture or do not have sufficient raw materials for self-sufficient manufactures.

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Cross-Cultural Perspectives on Knowledge Management These are cities built on thin strips between coast and hills, on deltas, drained marshes, or on islands. They arise in topographically difficult places. The development of collective intelligence is a compensation—and substitution—for the lack of conventional resources or factors of production. The portal creates advantage out of disadvantage. The second ulterior condition of the concentration of intelligence in the portal is that such cities have a strong sense of the sculptural. The denizen of the portal city is inclined to see the world as a plastic place. Portals are characterized by a distinctive combination of lightweight media and of plastic media. The life cycle of information, contingency, order, and innovation is driven by a response to the human condition of uncertainty. Let us call this the cybernetic cycle. Much of this process unfolds through the kind of lightweight media whose creations are portable and ephemeral—as one might expect where the driving force of the process is uncertainty. However, toward the higher end of the life cycle, as order and structure become more central to outcomes, plasticity and sculptural qualities become increasingly important drivers of collective intelligence. At this point, the civic and architectonic qualities of the portal emerge as a central feature of the cybernetic cycle.

INFORMATION AND UNCERTAINTY Information is a response to uncertainty. Human beings seek out information when they are uncertain. (This is not to say that they necessarily seek out challenging information; indeed, probably most often they look for information that is reassuring or comforting in the light of uncertainty.) Thus, a traditional village has a relatively low need for information. Its members typically never travel outside a radius of 15 or 20 miles, and their lives are ruled by the local forces of custom and the seasons. Of course, from time to time such societies will be subject to unpredictable events like wars and invasions, about which they will want to gather reports. But in the traditional agrarian society of this kind, such contingent events are exceptional, whereas in the case of a long-distance mercantile society, the need to respond to such events is an everyday occurrence. On a spectrum of societal types—from the agrarian to the industrial to the long-distance trading society—the last has the highest demand for information simply because it experiences higher levels of doubt on a regular basis and must master the resulting ambiguities and contingent choices. The wider the habitual scope of the transactions and traffic of a society, the greater is the experience of uncertainty and contingency. A society that conducts a high proportion of its transactions and traffic over long distances—either on a regional or global scale—multiplies its exposure to sources of uncertainty. Not all or even a majority of these uncertainties will be negative. However, simply by virtue of being uncertainties, they produce information needs. If stock markets plummet, war is declared, there is a virus outbreak, or some business teeters on the brink of bankruptcy, such events generate uncertainty. Demand for the production and transmission of information follows such events. Information is an attempt to answer the question “How can I orientate myself in this situation?” This kind of question has a high cognitive weighting. In contrast, in the village society, uncertainty generates questions with a high affective content. Uncertainty, in other words, triggers both affects (fear, alarm, and panic) and cognitive emotions (curiosity, interest, and attention). In traditional settings, uncertainty is ultimately

The Art of Systems resolved by the assertion of hierarchical order (often in the form of patrimonial structures). In modern societies, uncertainty generates demand for procedural guarantees— rules governing how we proceed. The model of such rules or methods emerges from the regulation of movement or procession across space. Thought anticipates (plans for) events. It constantly seeks information so it can make plans. Plans are possible because events can be correlated—on the X and Y axes of a Cartesian graph: “If X happens, then we can do Y to compensate.” Uncertainty in this case is resolved by being able to think about the paths of things through space as they cross and cause events in time. Methods, like the railway network timetable or the television network schedule, emerge to regularize these crossings. Procedural institutions, from government departments to commercial corporations, take shape around these methods. In the case of portals, uncertainty tends to be resolved in part through methodical network correlations, but also sometimes by the very opposite of the methodical approach—that is to say, uncertainty is resolved by paradox instead. Paradoxes are a path through complex or ambiguous situations in which the ambiguity of tension-filled contingencies is resolved into the ambidexterity of living with opposites. Paradox is a meta-cultural way of dealing with contingency. Thinking by paradox means that emphasis is placed less on if-then rules and methods—and more on the conceptual union of opposites. Immanuel Kant, in the conclusion of his Groundwork of the Metaphysics of Morals (1964), observed that the most demanding kinds of thought end in paradox. More specifically, he was arguing that there was no ultimate distinction between freedom and necessity. This is the mentality of the portal—for what it imports, it exports. Its thought is revolutionary—circular like a paradox. We begin with freedom and end with necessity that leads us back to freedom. Information is raw material for such Tao-like path making. The question of where the next concentration of intellectual capital might emerge was raised in Pauleen and Murphy (2005). The legacy of Taoism, especially its feeling for paradox and its geographical footprint, gives some hints about the cognitive mapping of the future. This theme is taken up in Murphy (2005c) and in Murphy and Hogan (2005). The greater the scope of human action is, the greater is the demand for information. Demand for information is a response to the uncertainty caused by enlarging the ambit of action. Information can be produced and transmitted in a vast array of genres—letters, documents, news reports, memoranda, analytic reports, commentary, official reviews, legally prescribed reports, and so on. Such information can also be produced and transmitted by electronic means. Electronic means of transmission have existed since the invention of the telegraph in the middle of the nineteenth century. Wireless media (broadcast radio, television, and mobile devices) and wired media (the Internet) in the twentieth century expanded the scope of instantaneous transmission, but not its fundamental nature. (Think of the innovative combination of telegraph, filing cabinet, and typewriter in the emergent form of the modern office in Chicago in the 1870s and 1880s: the office computer of the 1990s was only a fusing of these three functions into one machine combining digital transmission, electronic filing, and the keyboard.) Alternatively, information can be transmitted physically like any other commodity. Books are shipped, hard copies of documents are couriered, letters are carried by the postal system, and government reports are warehoused. The carriage and storage of information creates an economy. The foundation of this economy is uncertainty. Thus, much—perhaps most—of what is produced and

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Cross-Cultural Perspectives on Knowledge Management disseminated by this economy has little lasting value, and indeed much is redundant before it is ever stored or transmitted. Information is created and carried in response to an event, or a series of events. After an event is reported or analyzed, it is rare that anyone at a later time returns to the report or the analysis. Indeed, often the real value of information lies not with any particular item of information but rather in the way that the process of its production and distribution satisfies the demand for information and does so independently even of the content of the information. The board of a company in financial crisis will commission a strategic review, or a government faced with failing military power will commission an inquiry. But little beyond the executive summary of these documents will ever be read, and even those abstracts will not necessarily or even normally be acted on. In such cases, the process of creation and distribution of information satisfies demand for information without anyone ever caring what the report or document says. Looked at from this perspective, information is an index or measure of uncertainty in social situations. It is a bellwether of social anxiety and social curiosity. The demand for information is a response to the unknown or the unpredictable. To produce a statement that it will not rain tomorrow in the desert is a statement that has little or no information value. We already know that there is little risk of this happening anyway. Rain is an event that can and does occur occasionally in a desert. But such an event occurs within a known probability distribution. It is possible, but the probability is low that it will rain in the desert tomorrow. In contrast, if someone reports that tomorrow it is likely to rain in the desert, then that is a statement that deals with an event. Such a statement has some value, albeit of an ephemeral nature. The more the world is surprising or unpredictable, and the more it is filled with irregular events, the greater the demand for information. A world in which deserts are swamped with rain, the tropics are parched, temperate zones are frozen, and the icecaps are melting is a world starting to border on chaos. Such a world would be filled with the maximum amount of information, but this is not a world we would want to live in. Yes, artists from time to time play with the idea of the chaosmos, but this is a thought experiment. Those facing uncertainty demand information in the expectation of reducing uncertainty and with it the prospect of chaos.

CONTINGENCY AND ORDER How does information, generated by uncertainty, reduce uncertainty? It does so by helping to establish what has happened (report), and what has caused what has happened (analysis). Information conveys something not already known. Information does not always in itself alleviate the feeling that the world is chaotic. Reports of the free-fall of a stock market may induce a strong perception that the world is disordered. But information does nonetheless provide the raw material for the production of orientative knowledge—knowledge for devising a pathway around an unexpected event, and subsequently for understanding the causality of events and the way in which most events (that about which we are uncertain) are not purely random but have structural causes. To understand the structural causes of events, we must understand structures. We need to be able to show how events and actions take on recognizable patterns, shapes, and figures. Let us consider the first aspect of orientative knowledge—that of finding strategic pathways through and around events. It may surprise us to find out that it is raining in

The Art of Systems the desert. Possessing this item of information does not change the surprising nature of the event, but it does prompt us to formulate yes/no responses to the situation—to treat the event as something that poses contingencies that we have to decide between. Physical events, market events, and political events cause us to reorientate the course of our actions. If we hear reports of rain, we might have to decide whether to continue our planned journey into the desert until the event is over. Information—as the apprehension of uncertainty—presses us toward the formulation of contingencies. It does this because information is always an answer to an implied or actual question (query). An answer to a question carries information to the extent that it reduces the questioner’s uncertainty. A report that it is raining carries an implied question: viz., when will the event—the departure from regularity—be over (“When will the rain finish?”). When we pose that question to ourselves, we also pose the question of contingency: “Either we will stay put or we will continue with our trip.” Contingencies are alternatives, or choices, that we must decide upon. We can plan for contingencies. (“It might rain even in the desert—what do we do if it does rain??). But the “what if?” question—entertaining as that question is—rarely anticipates actual events. So we are left with surprises in light of which we must formulate new or adaptive courses of action. Portal societies are faced with contingent choices all of the time. In a metaphorical sense, any society that interacts with temperate, tropic, desert, and arctic zones at a distance is bombarded with surprises to the point where surprises are no long surprising. In such societies, orientating quickly and devising pathways that reduce both uncertainty and the flow of incoming information that results from uncertainty is at a premium. If uncertainty is not reduced, chaos results, both at the level of social and economic action and at the level of information (too much information creates its own uncertainty, viz. “Which item do I choose to read first when I have limited time?” and “Which items shall I ignore?”). As important as the ability to make contingent choices in response to uncertain situations is, there is still a yet more important operation that must accompany this at a higher level: the capacity for pattern recognition. Pattern recognition allows us to determine whether events belong to an underlying pattern. In performing this operation, we answer questions such as “Is rain in the desert an anomaly, or is it consistent with known probabilities, or is it indicative of a long-term change in climatic patterns?” What pattern recognition supposes is that physical, social-historical, and even divine events have an underlying order—that is, they are organized into systems. This does not preclude asystemic behaviors. Unpredictable physical events occur, political events remain surprising from time to time, markets on occasions rise and fall erratically, and fate can be arbitrary. However, the human capacity for pattern recognition is built on the natural fact that surprise is the exception rather than the rule and that the world is fundamentally orderly. More perplexing is the fact that the world may be orderly even when it does not appear to be so. The sudden death by suicide of a loved one may be a shocking event that “makes no sense,” but the joyless science of sociology nonetheless may well tell us that the person who has taken their life was a member of an at-risk group characterized by high levels of suicidal behavior. (Contemporary methods of data mining do exactly the same: They can predict that a customer who has a certain financial and credit history, and a particular social profile, and who buys a certain garment at a particular time in the cycle of the financial year, has a high probability of defaulting on

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Cross-Cultural Perspectives on Knowledge Management their credit payments.) Identifying a deceased person as belonging to a high-risk group may be little comfort to those who have lost a loved one, but it nonetheless underlines the fact that even events to which the labels “surprise” and “shock” are attached often belong to probabilistic or normative orders that are actually quite deterministic. The world has its stochastic and existential moments, and possibly even its miraculous moments, but we do not live in a stochastic world. Such a world would be chaotic and ultimately entropic. We cope well with, and even do interesting things with, occasional stochastic events. Some theories of artistic and personal freedom rate stochastic behaviors very high. But in reality it is the human capacity for perceiving order and producing emergent forms that is the real foundation of human freedom and creativity. To experience the world as chaotic is ultimately not a liberating or productive experience, except in small doses or at historically decisive junctures. Significant continuing levels of disorder generate entropy and decreasing levels of social and physical energy. In short, disorder is exhausting. Structures, in contrast, are energizing—though of course many so-called structures are nothing of the kind and are in fact chaos in the making. But where there is real order, which is characterized by beautiful, elegant, and economic forms or systems, brilliant things can be produced. Order should not be confused with rules or norms, protocols or procedures, customs or rituals—any more than knowledge can be equated with information. Rituals and rules at some level are generated or shaped by the forms that give us structure and order. They are the secondary or tertiary phenomenon of this order. Order can be best understood as an abstract figure or design, as a pattern. Order is the shape around which social structure and organization is built up.

SOCIAL GEOMETRIES From a social-historical point of view, order allows us to act in the world, to anticipate how we will act, and to understand retrospectively how we have acted. Referring strictly to the social-historical domain, here I distinguish between three fundamental kinds of order—order based on hierarchies, networks, and navigations. (See also Murphy 2003: this schema extends the typology of hierarchical, dynamic, and civic orders developed in Murphy 2001a.) These orders reflect different degrees of extension. Navigational orders extend the greatest distance, networks less far, and hierarchies least far. (For a discussion of the ethics of navigational orders, see Murphy 1999.) Hierarchy is a one-dimensional order. We can sketch a hierarchy by penciling a series of vertical dots and connecting the lines between them, and then branching further dots and lines (nodes and paths) from the initial set. We can build up a complex social and organizational structure around that diagram. In the social-historical domain, traditional, customary, and patrimonial orders are species of hierarchical order. We all recognize such social forms, even in their adaptive modern versions, where organizational hierarchies have largely though not completely replaced personal and traditional kinds of hierarchies. From the consensus-producing hierarchies of the Japanese company to the party bureaucracies of Mainland China, from the patron–client hierarchies of most of the world’s poorer states to the Fordist hierarchies of the modern procedurally driven departmentalized corporation, most societies still order many, and in some cases most, of their activities in an up and down manner.

The Art of Systems Yet, hierarchy is not the only kind of order. In the modern age, two-dimensional social geometrical forms have partially overtaken one-dimensional forms. Imagine that we take lines (paths) connecting dots (nodes), and we connect together those lines. We thereby create two-dimensional plane figures, representing things such as fields, windows, and tables. Field, window, and tabular images are central to the modern imaginary. (Correspondingly, many of the radical critiques of modernity end up being restatements of the logic of plane surfaces; see, for instance, Deleuze and Guattari 1987.) The pervasive late twentieth-century metaphor of windows, which accompanied the spread of information technologies, is an apotheosis of this kind of order. That is to say, not tree hierarchies but plane figures are the most common way that moderns have of both ordering and representing figuratively the world around them. Windows, mirrors, frames, maps, and facades dominate the modern social geometrical imagination. They do so because they embody the equality of the plane surface. They are structured, not up and down, like the levels of a hierarchy, but from side to side, as if on the plane surface of a billiard table. One of the early historical examples of the planar type of order was the ethos of the seventeenth-century English levelers. This was followed in the eighteenth century by the imagining of the world in two-dimensional longitudinal and latitudinal terms. The introduction of new worldviews is always a slow process. For example, convincing English royal science of the day of the validity of the planar representation of space proved quite difficult—because it conflicted with the hierarchical impulse to want to look upward to the stars (the heavens). Navigators liked the idea of longitude, but science preferred an implicit hierarchical order of steering by the stars. In this case, the planar conception eventually won out over the stargazers. But hierarchy never disappeared as a fundamental ordering principle. It merely took on new appearances. Hierarchies imply tight connections with powerful forces. The type of connection over plane surfaces is less intense. Plane surfaces are conducive to network connections. As things move across a plane surface in different directions, they cross paths, eventually composing a net-like pattern across the plane. In social action, such interactions on a field are organized by rules or plans for proceeding. This is what modern law does; it is also what democratic and organizational procedure does. They allow for orderly interaction on a field. They establish coordinate relations across planar surfaces. These relations mirror the equality of the planar surface as opposed to the hierarchy of an ascending-descending chain of being. The methods of flat organization, “one vote, one value,” and “one law for all” are all expressions of such planar equality. These images of order permeate the world. Take technology as an example. The desktop of a contemporary computer is without rank order, whereas the hard disk of a computer is normally organized around arboreal tree structures and nested hierarchies, as are the information architectures of institutional local area networks. Yet if we take a step beyond this level, and look at the technologies of inter-networked computing, we discover a different kind of order—the order of reconnaissance or navigation—where one cannot move using hierarchic cues or planar directions because of the scale of internetworked worlds. Navigational order as a consequence dominates the world of internetworked technologies. The nature of this order is to encourage movement in and around. Its key technologies are search technologies. Its organization is neither linear nor planar. It has a kind of plastic character—or at least, in the informational realm,

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Cross-Cultural Perspectives on Knowledge Management the virtual equivalent of three-dimensional plasticity (Murphy 2005b). To understand this, imagine if we take a number of plane surfaces and bolt them together. In doing so, we create stereometrical objects (three-dimensional objects) that bodies (other threedimensional objects) move around. We also create three-dimensional spaces that bodies move through. This is the essence of a navigational order. Hierarchical orders operate most effectively at high intensity over short distances. Network orders operate most effectively, at lesser intensity, over medium distances— such as within the borders of a nation-state. Navigational orders operate with minimum force over long distances. We can think of this in geopolitical terms. Hierarchies are most effective over localities. Correspondingly, big-scale hierarchies often have difficulty administering what is most distant from the root of the hierarchical structure. (The classic examples are the collapse of premodern empires into feudal hierarchies or else into competing warlord ruled territories.) Networks seem best disposed to national or continental scales. If we think of modern network building—the railroad and telegraph, and later telephone and broadcasting networks—their natural scope seems to be medium-scale territorial space. Hierarchies generate strong, but limited, connections, often of a personal kind and often regulated by ritual, custom, or loyalty, as well as by command. Network orders generate wider but less stringent connectivity. Network orders cluster human beings into associations rather than communities. Associations put human beings together in a lateral rather than vertical manner. They rely less on ritual, custom, and command than hierarchies do, and more on legal rules, procedures, and indicative guidance (i.e., policy). Modern organizations are frequently a hybrid of hierarchy and association. Modern organizations appear once systems have to be managed over national scale distances. Before that, family or patrician or party hierarchies could effectively coordinate actions. As and when these failed to translate satisfactorily to national or global scale, bureaucratic hybrids emerged. Modern bureaucratic hierarchy is a compromise between hierarchical and network forms. (Professional worlds are a similar hybrid: They encourage lateral transactions—for example, the national conference—but jealously guard tacit hierarchies of authority in the guise of reputable sources, journals, speakers, and the like.) Such hybrids allow action at a distance to be combined with smaller scaled features such as personal affiliation to bosses. Employees remain governed by local hierarchical structures while operating at large through contractual, contact, professional, peer, cross-departmental, interorganizational, and strategic-coalition networks. The network society is not a recent development. This is contrary to the view of Castells (2000) who regards the network society as a product of the explosion of information technology in the latter part of the twentieth century. The fact, though, is that this explosion piggybacked on existing network technologies (the U.S. and British phone networks in the first instance) which themselves descended from nineteenth-century American and British models of communication and municipal utility networks. Modern oceanic empires (the Dutch and the British) were effective in part because of their ability to develop functioning networks across the face of the globe. The purest example of the network society developed in the United States (Murphy 2004). This society has a strong lateral, associational dimension underpinned by legal and procedural norms. The network society is also a legalitarian society with strong planar characteristics. We see this inscribed in Thomas Jefferson’s legal device to subdivide all U.S. territory into

The Art of Systems a gridiron pattern. This checkerboard geometry with its network of intersecting lines was infinitely expandable across two-dimensional space—the type of space of the U.S. Geological Survey mapmakers for example. Underlying this was a simple equation: Law plus grid equals a dynamic society. As Jefferson anticipated, American power expanded from coast to coast, across the continent, and then beyond. It did so via networks. One of the greatest of these was the riverine network opened up by Jefferson’s purchase of the Louisiana Territory from the French. This enabled a commercial web that extended along the Mississippi River eventually from New Orleans to the Great Lakes, upward to the Gulf of St. Lawrence and downward along the Hudson River to New York City. Land networks (the railroad and the telegraph) followed. Eventually, these networks began to expand across the oceans via civil communications (first cable, later wireless and satellite) and by the strategic dotting of U.S. military bases across the globe. Networks are effective for coordinating action over the medium scale. Their effectiveness declines on the larger scale. A union of 50 states may constitute an effective federal network over a continental scale—but a union of 500 states over a global scale is inconceivable. It would simply be entropic. Even with its strategic networks and its networked alliances, U.S. military intervention worldwide can be effective only intermittently and for short- or medium-term durations. Similarly, think of the example of the original networking of computers in the ARPANET project of the 1960s. The U.S. Defense Department’s Advanced Research Projects Agency (ARPA) funded projects in the 1960s to network university computer labs. The principal figures in this research were J.C.R. Licklider and Larry Roberts. They worked out how to connect machines over a telephone network, solving especially the routing problems involved because of the large number of connections opened up by even a simple network. Paul Baran from the RAND corporation and British telecom engineer Donald Davies worked out the idea of sending messages around these networks not via continuous analog channels but via discrete, reroutable, noncontinuous packages of digital information. That was a very powerful extension of network geometry to computing. However, in the era of inter-networking, when networked computing was extended (through the amalgamation of networks) beyond a continental scope, a new logic overtook that of networking—the logic of navigation, in which searching and reconnaissance began to supersede the practice of strict networking. In the 1970s, Vinton Cerf and Robert Kahn devised the Transport Control Protocols (TCP) for networking different networks. Navigational logic is not primarily a logic of status (“here is my place”) or one of reasoning (“if X, then Y”) but rather one of morphology. It is an aesthetic logic. Successful searching through a google-sized quantum of data requires being able to recognize patterns. In a parallel sense, human creation (and quite probably natural creation as well) take forms (aesthetic patterns) and transforms them (Thompson 1961). A word of caution: There is nothing new about navigational order. It is as old as port cities. If we think of a society as a vertical branching line that converges on a root, or a network as grid, or lattice, or hatching of lines spread over a plane surface, a navigational order, in contrast, has a third dimension—that of depth. Navigational space is full of bays. It is convex/concave space. It is plastic space—space that is moved through and around. It is space that is entered and exited. It is recursive space in the sense that it is rotated through. It is the space of eternal return (Murphy 2001b).

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Cross-Cultural Perspectives on Knowledge Management Navigational orders are so called because of the load that they place on cognitive orientational competencies and emotions. In a hierarchical or network order, it is relatively easy to find one’s place. The symptom of the breakdown of an order is the systemic inability of agents to find their place. Hierarchies have lines running through connecting nodes from top to bottom. Webs, lattices, grids, and other network structures have high levels (redundant levels) of connectivity. Navigational orders happily employ elements of hierarchical and network forms. But they do not rely as heavily on connectivity as the other two do.2 To orientate and to structure movement, they use devices that are more abstract in a plastic sense. Navigational orders use high-level design features to structure movement and orientation, such as scale, proportion, contrast, symmetry, rhythm, and balance. These are pattern-forming geometric properties that the human brain readily recognizes even when it cannot necessarily describe the geometric properties underlying the forms. Knowledge of these features is usually tacit rather than explicit, but no less powerful for that. Scale, proportion, contrast, symmetry, rhythm, and balance apply to all aspects of the world—linguistic, visual, auditory, tactile, olfactory; aesthetic, intellectual, social, economic, political; organizational, associational, and customary. These pattern-forming properties play a role in hierarchical and network orders. Hierarchies can be structured to branch symmetrically; the grid is an example of the highly (almost inertly) symmetrical organization of a web. But it is under conditions of three-dimensional order that pattern-forming geometric properties take on an emphatic role. Think of the everyday act of walking down the street. We move through (navigate) a world that is filled with solid geometrical objects. We may know we are walking along a grid because we are used to looking at maps of gridiron streets, but we actually orientate ourselves by observing around us the literally thousands of patterns created out of scale, proportion, contrast, symmetry, rhythm, and balance (and the calculated departures from these).

RECURSIVE OR CIRCULAR KNOWLEDGE Exactly the same thing applies to knowledge. When we take the simplest of data and start to structure it, we create objects that we must navigate. Taped voice messages, video clips, letters, reports—indeed any information-carrying entity—must be navigable if it is to have any force. Its force is its navigability, and its navigability is the effect of its lucidity, the power of the patterns from which it is composed. Take the example of one informational object—the document. The document is the basis of modern governance. We can build tree hierarchies of documents, and we can link documents into web-like patterns. This was the motivating schema of Tim Berners-Lee (1999) in the early 1990s, when he devised his URL, HTTP, and HTML protocols for linking documents stored on networked computers. However, when we move around the object itself, these types of orderings are helpful only in a limited way. To navigate the object, we need other cues, such as visual symmetry, scale, and proportionality. All information objects, from the microscopic to the macroscopic level, can be organized in such patterns. The letters on a page are made up of contrasting dots against blank space organized in regular ratios. Text on a page is organized symmetrically, or with deliberate departures from symmetry. The size of headings, subheadings, and text on a page is scaled—large, medium, and small size. More complex page layouts utilize the same tacit geometries. Space is divided

The Art of Systems into scales, ratios, and rhythms allowing the eye to easily navigate the page. All of this is conditioned by the fact that the space between the reader’s eye and the surface of the page is three-dimensional space. Exactly the same applies to larger intellectual, organizational, and social systems. Systems can be formed on the basis of properties that allow movement and orientation through space without strong connections. In hierarchies and network models, when connections break, systems fail. To ensure connectivity, systems need sanctions or the enforcement of some kind of law or policy or protocol or law-like agreement. Peer, coalition, contractual, and other network relations are underpinned by rules and protocols. At the same time, the transactions possible for any one node in a network depend on the connection strengths and activity of its correspondents. When correspondents are too close, personal qualities (trust, loyalty, and preverbal understandings) are much more effective than networked association. However, beyond a median point, the greater the distance a system must cover, the more connection strengths will be strained. Thus, for action outside of the middle ground, a paradox presents itself: How can we have interaction without connection? Interaction without connection was the basis of the first markets—I am assuming here Karl Polanyi’s (1977) distinction between local exchange and market exchange, which is carried on over a distance and outside of a given society—when unaffiliated tribes began to trade without actually meeting one another. Fearful of strangers, but wanting goods available outside their kin structure, the first market traders would leave goods at their tribes’ boundaries; these would be collected anonymously and other goods left in their place (Brown 1990). Hermes was the god of this silent trade in archaic Greece. This kind of trade was known in many societies. (For archaic examples of silent trade, see Grierson 1903.) It was probably the first actual instance of global trade in the modern era. As the Portuguese began to pioneer oceanic trade routes, the trade carried on between the Portuguese and populations on the African west coast was conducted initially by silent trade techniques. According to Herodotus (Histories, Book 5), the Carthaginians used similar techniques when they were trading with “a race of men who live in a part of Libya beyond the Pillars of Heracles.” The asynchronous and anonymous nature of the exchange seemed to generate very good outcomes: “There is perfect honesty on both sides; the Carthaginians never touch the gold until it equals in value what they have offered for sale, and the natives never touch the goods until the gold has been taken away.” It is actually possible that some of the tensions of loyalty and network transactions are simply avoided by this system. Hermes was the god of the boundary-crossers (those engaged in various kinds of silent trade) in societies that had strong near-toclosed boundaries. Silent trade began out of the fear of strangers. Ironically, the spaces where it was conducted—at boundaries and crossroads—eventually became hubs filled with strangers conducting silent trade. Eventually these strangers would create their own society—the portal society. Silent trade has taken on many forms through the history of mercantile and cultural traffic. Consider the impact of electronic means of communication in the late twentieth century. The electronic linking of documents stored on networked computers enhanced the degree of lateral access to documents. This was a conventional effect of networking. But electronic linking also expanded the potential for silent trade both in a commercial and intellectual sense. It created asynchronous transactional structures that

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Cross-Cultural Perspectives on Knowledge Management enabled agents to act and react on the basis of information, while machines mediated their transactions. This created a form where agents could act and react not just on the basis of information that they provided each other, but also on the basis of knowledge they acquired of the collective patterns of action and reaction of people involved in these transactions. Data logged as a result of machine-to-machine transactions made it possible to analyze the characteristics of anonymous agents and mine for statistical correlations indicating behavioral patterns—for example, “people who read document X who also read document Y” or “people who purchase commodity N also purchase commodity P,” and so forth. What the aggregation of such data establishes is not the boundaries of a community (of trust) or an association (of peers) but the existence of anonymous collectives of usage, transaction and type. This offers self-reflexive and selfmonitoring understandings of silent trade based on interaction without connection. Decision markets (Surowiecki 2004) are yet another contemporary example of silent trade. These are markets where individuals are required to make a judgment independently of each other. This might be to decide “How many jelly beans are in a jar?” “Who will win the next election?” or “Which stock will perform best?” The mean of these judgments is uncanny in predicting the right answer. Well-run stock markets and elections have a similar propensity to “get it right.” One of the reasons this is so is that decision markets mobilize knowledge without this knowledge being distorted by persuasion. The earliest theories of knowledge, developed by the ancient Greeks, harbored the suspicion that persuasion, far from enhancing collective decision-making, often degraded it. It was sophistic. Arbitrary factors—such as who speaks first or who speaks loudest, as well as the desire to be liked by others or the fear of offending others—deform discursive reasoning. Bad judgments, as well as good ones, communicate well. There are always good reasons for doing bad things. The best, collective decisions occur where decision makers have the greatest independence of each other. The mean of a set of independent judgments is more likely to “hit the mark” than the communicative consensus of experts, pundits, or committees. Decision markets—such as betting on an election or institutions structurally akin to them, such as voting in an election—may occur against a discursive background, but the market itself is silent. Such decision markets in practice are much more accurate in predicting outcomes, and probably a lot better at securing outcomes, than any consensus of experts is. The strength of decision markets lies in the paradox of interaction without connection. Interaction without connection has always been of particular interest to small states, especially city-states based on portal trade, and to economic regions that occupy extraterritorial space (particularly sea space) between large states. Unless they acted imperially, portals and city-states traditionally lacked the ability to administer or control the trade networks that they were dependent on. Some city-states, such as Venice, were forced into empire building to protect and augment their networks. Antiquity was a model for this. The Attic, Hellenistic, and Roman Empires all married hierarchic command structures with lateral networks. The Romans, for example, were brilliant road builders; and they put in place a very effective postal system that carried mail long distance across sea and land. But to control networks, protect them from enemies, and drive their extension, the Romans turned to imperial techniques. This did not mean that Rome lost the capacity for lateral organization. It just combined that capacity with hierarchical structures. But even when city-states were forced into empire-building,

The Art of Systems they also relied on their capacity for interaction without connection. To do so, they had to create transport, trading, and other systems that were self-steering. Self-steering supposes that a system acts in response to information. The result of this action generates new information that in turn generates a new response and new action. Information comes from external and internal sources. As these kinds of self-steering loops become more sophisticated, information is archived, and that (accumulated, objectified) information becomes part of the way of generating new or modified behaviors. The most effective looping of information and action occurs under conditions in which information is treated as patterns. Stories, documents, protocols, and news reports each have their own generic structural patterns. Beneath their literary surfaces they all suppose some patterned relationship between events. The greatest city-states and portals have been those that excel at theoria—at high-level pattern recognition and production. Self-steering is a type of autonomy. City-states and city regions are interested in autonomy because, more often than not, if they are not able to self-steer (interact without connection), they will be assimilated into some larger hierarchical structure or spatial network. A condition of their existence is to be very good at self-steering. This means to be able to act in response to external conditions and contingencies without their actions being set in motion by either the “unmoved mover” (the root node) of a hierarchy, or by the correlation of forces produced by distributed networks. One of the reasons why the ancient Greek city-states resisted federalism (even though they invented the idea) was likely that it subtly impinged on their self-steering capabilities. Self-steering systems internalize causation. This was the basic point of Norbert Wiener’s (1948) theory of cybernetics, which was a play on the Greek word for steersman. When a steersman of a boat moved a rudder, the craft changed its course. If a steersman detected that the previous change of course had overshot the mark, the rudder was moved again to correct the boat’s drift. Self-steering systems do not rely on the teleology (the final cause) of the unmoved mover, or on the convergence of multiple efficient causes of network agents, to drive them. Instead they loop, which is simply another way of saying that they are autonomous or self-regulating. Causation is enacted in time. Causation creates or regulates a succession of events or actions in time. To say that a social action “is caused” is simply to say that social movement or action occurs in time in a manner that belies a discernable underlying pattern. In a hierarchical order, causation functions to drive movement up and down branching lines—from the top to the bottom, and from the bottom to the top. Everything is set in motion by the root node. In a planar order, causation generates movement across a plane, from side to side—from coast to coast for example. Intersection between nodes, or the convergence of efficient causes, drives this kind of movement. In a navigational or portal order, in contrast, causation is primarily formal: It relies heavily on pattern recognition and production. Formal properties are the preeminent cues for steering, which is the fundamental act of navigation. Steering drives movement in and out, around and about. The typical pattern of motion is the circular movement of opening and closing, arriving and departing, through and around. This type of causality is almost acausal. In a circular or rotational pattern, the strict difference between cause and effect is blurred or obliterated. The navigator is constantly taking on board tiny bits of pattern-information and adapting actions accordingly.

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Cross-Cultural Perspectives on Knowledge Management Pattern production is the highest stage of intelligence. To create forms is the most demanding and the most difficult of all intelligent functions. The historical incidence of formative power is not evenly distributed. A relative handful of times and places are responsible for the largest quantum of form-creation. As has already been noted, sea regions and portal cities are in turn responsible for the largest portion of this quantum. The classic cases are the ancient Greek and Roman Mediterranean–Black Sea region; the medieval Silk Road–Caspian Sea ecumene; the Renaissance Mediterranean; the early modern Baltic Sea–North Sea; the modern China Seas; and the nineteenth-century Great Lakes–Hudson ecumene. Athens–Piraeus, Rome–Ostia, Alexandria, Constantinople, Bukhara, Venice, Florence, Amsterdam, London, Stockholm, Shanghai, Chicago, and New York City have all played a vastly disproportionate role in form-creation—in artistic, scientific, economic, and social creation. One possible reason for the coincidence of form-creation and portal activity is that the portal city and the sea region are navigators’ domains. This is meant not just in the obvious sense that these places are mariners’ domains, but also in the more complex sense that these are by their nature places for the organization of long-distance traffic and logistics, and mercantile and cultural interaction. Such things, of course, can be and are organized by bureaucratic hierarchies and network organizations. Yet, the effectiveness of these stands in an inverse relation to the distance over which they operate. The further away we move, the less compelling is the power of contractual or peer networks. Under these conditions, the silent trade of interaction without connection becomes more important. Portals provide sophisticated versions of this because they are “cities of turnover.” The churn of these cities is conducive to interactions without connectivity. These are interactions that are supported not by hierarchic connections or networked associations but by abstraction. Portals, of course, have hierarchies and networks in abundance, but they have something additional—plastic milieus through which is it easy for itinerants and strangers to move, and that are crucibles for the emergence of material, technological, and intercultural forms. Aristotle proposed that ideally a city-state should be self-sufficient. To modern ears, that idea sounds like a proposal for a closed society. It sounds like China in the 1960s or Burma in the 1990s. But that was not what Aristotle had in mind. Sparta was not his idea of a normal city. Rather, self-sufficiency meant something like self-steering. In fact, kybernetes, the steersman, was a common Greek metaphor for the state. Self-steering was paradoxical. The city of Aristotle’s acquaintance had extensive contact with the world, but it arranged its affairs such that it was not beholden to the world. This is a difficult balancing act. It is only possible because portal societies are intensely interested in the world but without being suborned to hierarchic loyalties and planar networks. Knowledge plays a special role in the portal city’s adaptation to the exigencies of the world. The more closed a society is (the Spartan model), the more tight-knit it is, the more it relies on local affinities of loyalty and trust, and the more suspicious it can be, as well as the more hostile to aliens and strangers. The Chicago School sociologist W. I. Thomas made the observation about how the ties and feelings of locality, or what he called the “primary group,” are projected onto larger-scale organizations and spaces: The Polish peasant uses a word, okolica, ‘the neighborhood round about,’ ‘as far as the report of a man reaches,’ and this may be taken as the natural external limit of the size of the primary group—as far as the report of a member reaches—so long as men have

The Art of Systems only primary means of communication. But with militancy, conquest and the formation of a great state we have a systematic attempt to preserve in the whole population the solidarity of feeling characterizing the primary population. The great state cannot preserve this solidarity in all respects—there is the formation of a series of primary groups within the state—but it develops authoritative definitions of ‘patriotism,’ ‘treason,’ etc., and the appropriate emotional attitudes in this respect, so that in time of crisis, of war, where there is a fight of the whole nation against death, we witness, as at this moment, the temporary reconstitution of the attitude of the primary group.” (Thomas 1966, 169–70)

An open society (a liberal network society like the United States), in contrast, does not function at all like a primary group, except in moments of crisis. Network relations are thin, not thick. Contract trumps community, and institutional procedure is more powerful than moral solidarity. The cost of entry to a network is low. An open society depreciates local affinities for networks that are infinitely extensible. These, though, have diminishing power or efficacy beyond the medium scale. The portal, by contrast with this, is paradoxical. It has a strong capacity to create boundaries—to demarcate itself from its environment—and yet it is porous: Goods, people, or information freely flow in and out of it. Great portal cities, for instance, engender strong civic identification and patriotism (“a strong sense of place”) but, at the same time, attract large numbers of outsiders to settle there and still larger numbers to pass through. To be both open and bounded is a powerful condition. Its power arises from its paradox. Cities of turnover that encourage and attract those who act and see the world not in terms of personal affiliation or networked association but as structure, form, and pattern have a subtle advantage. Such persons can engage in the quid pro quo of trade and traffic without the transactions being dependent on mutual consent or on face-to-face attachment. A place where large numbers of such people congregate is likely to be capable of producing emergent forms. That people do congregate in such places is a function of the need of portals to organize action at a distance. Such organization is optimally achievable when systems are self-organized through forms rather than via networks of coefficient causality or by the directing action of the unmoved mover of a hierarchy.

MANAGEMENT OF KNOWLEDGE The largest companies in the world, almost without exception, are headquartered in portal cities. As the maps in Slater (2004) indicate, most of the headquarters of Fortune 500 companies are located (in Asia) in the Japan archipelago and the South Korean peninsula; (in the United States) in the East Coast, Great Lakes, Mississippi, California coast, and Gulf of Mexico zones; and (in Europe) in southeast England, the Île de France, and the Rhine–Danube zone. To indicate just how difficult it is to escape this logic, two or three Fortune 500 companies are headquartered in territorial Beijing, but Taipei, the capital of the island of Taiwan, has the same number. The dominance of portals is because these cities (1) maximize access to information (and most especially information summarized in prices); (2) constitute nodes in the most important distributive networks in the world; and (3) excel at generating forms and accumulating knowledge of forms. Of all of the many functions of the firm, the generation of productive forms, in the long run, is the most important. Firms compete on price. They also accumulate market power (market share) through supply chains and

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Cross-Cultural Perspectives on Knowledge Management distributive networks. But the most successful firms are art firms or science firms; they compete on the design of products and systems. They compete on quality. All firms and institutions have scarce resources. The better the use of these resources is, the more viable the company or organization will be. It is here that aesthetic knowledge comes into play. For, ultimately, efficiency and economy are a species of beauty. If a technologist figures out how to reduce the power consumption of a refrigerator by a factor of ten (which is what technologists achieved during the 1990s), this will be a more marketable fridge than one that is simply cheap. From the science angle, the technologist who does this is always finding more elegant solutions to technical problems, just as the commercial designer who finds the most elegant touch pad arrangement to work the device does so from the art angle. The same applies to economies. When looked at closely, the economy of Mainland China in the 2000s appears much less like the nirvana of growth that journalists routinely tout and much more like a nightmare of gross inefficiency. When we observe China use seven times the energy of Japan, six times the energy of the United States, and three times the energy of India to produce the same unit of output, the overriding importance of technical design becomes clear. Design plays an ever-growing role in consumption as well as production. Indeed, the most sophisticated consumers make purchasing decisions based on aesthetics not price. These may be the aesthetics of the product or of the shopping center where it is purchased. But aesthetics is not just wrapping. It is implicated in the very heart of creative production, and this has enormous implications for wealth generation. Simply put, a company that develops a new pharmaceutical is better placed than one that produces existing drugs more cheaply. This is essentially what a knowledge economy is. It is an aesthetic economy. It is propelled by firms that compete through design—be it the design of a tin can, a drug, a piece of software, a highway, or a book. The implicit idea behind a design always belongs to the human commons. But the work of teasing out what is implicit, and making it explicit, can be turned into property. Increasingly much of what makes the most valuable firms valuable is such intellectual property. Portal city regions have long been social laboratories of design. Venice built its economy on the design of better boats. Portals like Venice also invest heavily in the design of the built environment. This is not a matter of luxurious ornamentation or conspicuous consumption. Rather, beautiful cities provide the most intensive exposure of their denizens to form. They thereby inspire and encourage designing intelligence of all kinds. There is strong evidence that human neurology is open-ended. Neurological structures are not a genetic inheritance but are formed through the interaction of the human mind with its environment by creating its own artificial environment. The built environment of the city has long been a key to nurturing the architectonic structures of human intelligence (Allen 2004). Unsurprisingly then, high-quality arts and sciences have had an historic propensity to concentrate in portal cities that have invested massive wealth in the building of city squares, churches, museums, and campuses. From London and Edinburgh to New York and Hong Kong, from Athens to San Francisco, Rome to Chicago, this has been true. All of this has implications for the management of knowledge. First, the management of knowledge occurs on macro, meso, and micro levels. Great firms take an interest in their city regions—they invest in them through their building and sponsorship programs, just as the Renaissance guilds did in Venice and Florence.

The Art of Systems The macro and meso levels of city region and firm cannot be entirely separated. The commons of the city is the necessary complement of the private domain of the firm. One produces ideas, the other produces intellectual property. There is not a firewall between. Common wealth and private wealth are mutually implicated. One advances or retreats with the other. Striking the balance between them is difficult, but achieving it is enormously productive. Second, knowledge that has it roots in the commons should not be confused either with information about contingency or with the protocols of connectivity that typify distributed networks. Rather, the core of knowledge management is concerned with enhancing the art and science of an organization. For sure, such management is invariably conditioned by the imperatives of contingency and connection. When the old Soviet Union triggered an explosion of American space science—with the news of its Sputnik flight—this set off the accelerated development of the high-tech Gulf of Mexico–Floridian Coast space economy. But a certain sign that knowledge is more than a response to contingency, and more than a function of the proliferation of connections, is illustrated by the first great organization of the space economy, the National Aeronautics and Space Administration (NASA). NASA developed as a typical Fordist organization. It combined bureaucratic hierarchy with a national network artfully distributed across politically powerful states (with headquarters in Washington, DC, and Centers in California, Ohio, Maryland, Texas, Florida, Virginia, Alabama, and Mississippi State). It had great successes and great failures. Its greatest failure, the Space Shuttle Columbia disaster, encapsulates the limits of knowledge management in such organizations. The day before the shuttle’s breakup, NASA’s engineers were to be found busy debating hypothetical contingency scenarios of “what would happen if’ the Shuttle’s heat-shield tiles failed.”3 Such prescience was spooky. Good engineering can be tested by if-then reasoning. But, in the end, such testing cannot overcome bad design, and this was the shuttle’s problem. Fundamentally from the beginning, it was a poor design. Information cannot substitute for good design. Another way of putting this is that the logic of knowledge is different from the logic of contingency, or for that matter from the logic of networks. Contingency generates lots of reporting—on risks and possible responses. Networks require a large amount of time to maintain linkages—relations between different offices and campuses. Most of this activity, though, is secondary to the art or science of design. If-then reasoning, and its endless demand for information, has decidedly fewer beneficial effects in the world than might be supposed. This is not just because, as economists have long known, information in the real world is imperfect but simply because good design (read beautiful form) in the first place is often a better way of obviating risk than incessant planning for it. Intelligence failure is inherent in projecting scenarios of highly uncertain environments (e.g., warfare, space voyage). What is important is not so much that bad things occur, but that good system design allows recovery when the unpredictable but inevitable dire event happens. When we understand the limits of contingency management, we also understand why it is that so many firms and organizations rely so much on branding. A brand is a simple visual abstraction (an iconic design) that binds individuals and agencies across distance irrespective of location. A brand is a visual form that communicates silently. This is also what knowledge, albeit in a much more complex sense, does. Knowledge, understood as the art of systems, creates effects without relying on bureaucratic hierarchy or procedural

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Cross-Cultural Perspectives on Knowledge Management negotiation. Knowledge spreads without time-consuming transactions between agents. This is because it is shape-like. In our imagination, the virtual realm par excellence, we can “see,” “hear,” and “touch” the shapes of knowledge. Think for example of DNA—it is a double helix. Grasping the shape was the key to unlocking the knowledge of the genome. Knowledge acquisition in organizations is similar. Its most powerful media are morphological. This is true, ironically enough, of the knowledge of hierarchy and networks as much as anything else. Before we describe them or enact them, we “see” them. But hierarchies and networks are not necessarily the most interesting or even the most robust of cognitive-aesthetic structures. Structures like symmetry, balance, rhythm, and proportionality—and shapes like those of skeletons, sponges, interfaces, tiles, and cells—abound in art and science. The challenge of knowledge management is to help create contexts in which reasoning and imagining about these are not overwhelmed or overdetermined by the imaginary of hierarchies and networks. A related challenge, then, is to turn the management of knowledge into the knowledge of management. In the simple sense, this means to find ways of using the art of systems to redefine management away from the overworked imaginary of hierarchy and network to one that begins to explore a larger morphological universe filled with other reliable structures like skeletons, sponges, and interfaces. Endless instructions down the hierarchy, and repeated negotiations across networks, are not the sign of successful firms or organizations. Knowledge in the strong sense, in contrast, is a deep repository of cognitive-aesthetic forms.

CONCLUSION Cognitive-aesthetic knowledge is found everywhere. But, in its most developed forms, it clusters. Notably, as has been observed, it clusters in portals. Most people are shocked when they first meet New Yorkers on the street. They are rude—their address is bluff, gruff, and short. The stories told about Venetians in the old days, or about denizens of Shanghai today, are pretty much the same. This is not surprising. Portals, by their nature, are ecumenical. They harbor a multitude of languages, nationalities, faiths, and customs, and they put them together in one, usually tiny, place. In such places, communication works best when it is aesthetic. Irrespective of language, nationality, and faith, people understand beauty. Beauty is silent. Beauty is the essence of a good system. Beauty is the paradigm of economy and efficiency. From Venice to New York, Shanghai to San Francisco, portals have developed aesthetic form as the complement of, and sometimes substitute for, rules and hierarchies. In this world, the art of systems flourishes as the medium of silent trade and of interaction without connection over distance. Thus we end where we began, with a singular proposition: The most interesting and most efficacious kind of culture from the perspective of fundamental innovation is the meta-culture of the city. Cities, in this department at least, trump nations. The artknowledge of the city is the acme of human knowledge. No matter how much human beings mobilize religious or national norms in economic life or organizational behaviors, it is art-knowledge, or pattern knowledge, that shapes the most important breakthroughs in production and distribution, organization and governance. Irrespective of whether it is the engineers in Houston’s space administration or the designers of assembly-line robots for a Japanese car manufacturer based in Tokyo, the same basic fund of pattern

The Art of Systems knowledge is drawn on. It is to this kind of knowledge, and its concentration in great cities, that we owe the most far-reaching experiments in economy making and organizational development. For this reason, the capacity to manage pattern knowledge, to understand its dynamics and its mimetic distribution, is essential.

NOTES 1. This invention possessed virtually all of the structural features of electronic commerce that appeared a little more than a century later. These features included purchase at a distance based on selections from distributed catalogs, the central warehousing of commodities, placement of orders via a communications network (the post office in the nineteenth-century case), distribution of goods via post offices, reliance on customer trust to purchase goods “sight unseen,” and asynchronicity between payment and delivery of goods. 2. A parallel can be drawn here with debates about the functioning of the human brain. Connectionist models of the brain explain cognitive functioning in terms of neural networks. Hebb’s 1949 rule states that learning is dependent on changes in the brain caused by correlated activity between neurons. When two neurons are active together, their connection is strengthened; when not, the connection is weakened. Intelligence is located in the connections between neurons. In response, Fodor and Pylyshyn (1988) identify a feature of human intelligence that they call systematicity. Systematicity is something that connectionists cannot account for. The systematicity of language refers to the pattern nature of language behavior. It accounts for the fact that the ability to produce or understand some sentences is tied to the ability to produce or understand others of related structure. 3. E-mails show that National Aeronautics and Space Administration (NASA) engineers predicted the Columbia disaster. The Associated Press (2/27/03 Washington) indicated that newly disclosed e-mails inside NASA showed senior engineers worried a day before the Columbia disaster that the shuttle’s left wing might burn off and cause the deaths of the crew, a scenario remarkably similar to the one investigators believe actually occurred. The dozens of pages of e-mails describe a broader, internal debate than previously acknowledged about the seriousness of potential damage to Columbia from a liftoff collision with foam debris from its central fuel tank. Engineers never sent their warnings to NASA’s leadership. Engineers in Texas and Virginia fretted about the shuttle’s safety during its final three days in orbit. One speculated whether officials were “just relegated to crossing their fingers,” and another questioned why such dire issues had been raised so late. “Why are we talking about this on the day before landing and not the day after launch?” wrote William C. Anderson, an employee for the United Space Alliance LLC, a NASA contractor, less than 24 hours before the shuttle broke apart February 1 while returning to Earth. NASA said those messages—including the few that were hauntingly prescient—were part of a what-if exercise by engineers convinced the shuttle would land safely despite possible damage from foam that struck insulating tiles on the spacecraft’s left wing at liftoff. “It was a surprise to us when the ‘what-if’ scenario played out,” said Robert Doremus, head of the mechanical systems group in Mission Control. “We were not expecting that.”

REFERENCES Allen, B. 2004. Knowledge and civilization. Boulder, CO: Westview Press. Associated Press 2003. E-mails show NASA engineers predicted Columbia disaster. http:// abclocal.go.com/ktrk/news/22703_nat_shuttleemail.html Berners-Lee, T. 1999. Weaving the Web. London: Orion.

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Cross-Cultural Perspectives on Knowledge Management Brown, N. 1990/1947. Hermes the thief: The evolution of a myth. Great Barrington, MA: Lindisfarne Press. Castells, M. 2000. The rise of the network society. Volume 1, 2nd ed. Oxford: Blackwell. Castoriadis, C. 1997. World in fragments: Writings on politics, society, psychoanalysis, and the imagination. Stanford, CA: Stanford University Press. Deleuze, G., and F. Guattari 1987. A thousand plateaus: Capitalism and schizophrenia. Minneapolis: University of Minnesota Press. Fodor, J., and Z. Pylyshyn 1988. Connectionism and cognitive architecture: A critical analysis. Cognition 28:3–71. Gelertner, D. 1998. Machine beauty: Elegance and the heart of technology. New York: Basic Books. Geohive n.d. Largest seaports in the world. http://www.geohive.com/charts/charts.php?xml=ec_ seaport&xsl=ec_seaport Greene, B. 2004. The fabric of the cosmos: Space, time and the texture of reality. London: Penguin. Grierson, P. J. H. 1903. The silent trade: A contribution to the early history of human intercourse. Edinburgh: W. Green. Heller, A. 1985. The power of shame: A rational perspective. London: Routledge and Kegan Paul. Howkins, J. 2001. The creative economy. London: Penguin. Kant, I. 1964. Groundwork of the metaphysics of morals. New York: Harper and Row. Kotkin, J. 2005. American cities of aspiration. Weekly Standard 10:21. McGuire, S., E. Conant, and S. Theil 2002. A new Hanseatic league. Newsweek International, 11 March: 14. Miller, D. 1996. City of the century: The epic of Chicago and the making of America. New York: Simon and Schuster. Miller, W. 1968. A new history of the United States. London: Granada. Murphy, P. 1999. The existential stoic. Thesis Eleven: Critical Theory and Historical Sociology 60: 87–94. ———. 2001a. Civic justice: From Greek antiquity to the modern world. Amherst, NY: Humanity Books. ———. 2001b. Marine reason. Thesis Eleven: Critical Theory and Historical Sociology, 67:11–38. ———. 2003. Trust, rationality and virtual teams. In Virtual Teams: Projects, Protocols and Processes, ed. D. Pauleen, 316–42. Hershey, PA: Idea Group. ———. 2004. Portal empire: Plastic power and thalassic imagination. New Zealand Sociology 19 (1): 4–27. ———. 2005a. Knowledge capitalism. Thesis Eleven: Critical Theory and Historical Sociology 81:36–62. ———. 2005b. The n-dimensional geometry and kinesthetic space of the Internet. In Encyclopedia of Multimedia Technology and Networking Volume 2, ed. M. Pagani, 742–47. Hershey, PA: Idea Group. ———. 2005c. Unsocial sociability: The paradoxes of intellectual capital formation and social capital networks. In The Third International Conference on Politics and Information Systems Technologies and Applications Proceedings, eds. J. Carrasquero, F. Welsch, A. Oropeza, T. Flueler, and N. Callaos, 405–10. Orlando, FL: PISTA. ———. 2006. Sealanes. In Sociology—Place, time and division, eds. P. Beilharz and T. Hogan, 38– 44. Melbourne: Oxford University Press. Murphy, P. and T. Hogan. 2005. Creative cities and intellectual capital: Megapolis, technopolis and the China Seas region: The economics of paradox. Paper presented at the Eighth Asian Urbanization Conference, The University of Marketing and Distribution Sciences, Kobe, Japan.

The Art of Systems Murphy, P. and D. Roberts. 2004. Dialectic of romanticism. London: Continuum. Murray, C. 2003. Human accomplishment: The pursuit of excellence in the arts and sciences 800 B.C to 1950. New York: HarperCollins. Parker, G. 2004. Sovereign city: The city-state through history. London: Reaktion. Pauleen, D. and P. Murphy 2005. In praise of cultural bias. MIT Sloan Management Review 46(2): 21–22. Polanyi, K. 1977. The livelyhood of man. New York: Academic Press. Porter, M. E. and S. Stern 2001. Innovation: Location matters. MIT Sloan Management Review 42(4): 28–36. Slater, E. 2004. The flickering global city. Journal of World-Systems Research 10(3): 591–608. Surowiecki, J. 2004. The wisdom of crowds. New York: Doubleday. Thomas, W. I. 1966. Analytical types: Philistine, bohemian and creative man. In On social organization and social personality: Selected papers, ed. M. Janowitz, 169–70. Chicago: University of Chicago Press. Thompson, D. 1961/1917. On growth and forms. Cambridge: Cambridge University Press. Wiener, N. 1948. Cybernetics, or control and communication in the animal and the machine. New York: Wiley.

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SECTION 2 Effects of Culture on Key Aspects of Knowledge Management

4 Cultural Stretch: Knowledge Transfer and Disconcerting Resistance to Absorption and Application Gerhard Fink and Nigel Holden

ABSTRACT International knowledge transfer does not follow a straightforward scheme. There is ample evidence that, even if senders and receivers of management knowledge are initially cooperative, expectations of both sides cannot be met, and within a relatively short period of time, conflicts unavoidably emerge caused by communication problems due to cultural differences. It can take 18 months or two years to overcome that period of disappointment and resistance. These effects can only be overcome if senders and receivers of knowledge socialize, develop, and maintain contacts both in the business and also in the private sphere. Furthermore, even if the transfer of explicit knowledge (written, codified) is complemented by transfer of tacit knowledge, it may take seven years or longer to achieve a smooth transfer and acceptance of knowledge. It is also crucially important to deploy the right people—that is, individuals who are locally sourced and with appropriate personality characteristics. Finally, successful knowledge transfer must operate in a society that is open to the application of the management knowledge being made available. When a best practice migrates, its quality and perceived usefulness and applicability change. It becomes something different.…

INTRODUCTION The importance of knowledge management (KM) as a core aspect of the international activities of corporations is beyond dispute. This conviction is unambiguously articulated by Heinrich von Pierer, the chief executive officer of Siemens, whose company is featured in the one of the contributions to the Academy of Management Executive Special Issue on global transfer of management knowledge (Fink and Holden 2005a).

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Cross-Cultural Perspectives on Knowledge Management He is quoted as saying, “Between 60 and 80% of the value added we generate is linked directly to knowledge—and that proportion is growing.” But exactly how this global, multiplex transfer of management knowledge is most effectively accomplished is a matter of contention. This chapter aims to throw useful light on that key issue by means of (1) presenting an up-to-date overview of state-of-the-art academic knowledge about the global transfer of management knowledge and (2) underpinning this overview with a perceptive commentary. During 2004 and 2005 Fink and Holden (2005a, 2005b) prepared special issues of two academic journals—the Academy of Management Executive (AME) and the Journal of Managerial Psychology (JMP)—about the challenge of transferring management knowledge in the context of the modern global economy. The theme of the AME special issue, which appeared in May 2005, addressed the general question of the global transfer of management knowledge from a management perspective. For the time being at least this special issue is without question a leading guide to the state of the art in what is emerging as a critical management function. The special issue of JMP, published in late 2005, goes beyond the managerial issues and focuses consciously more on what one might call the human side of cross-cultural knowledge transfer interactions. But why are the editors confident of having access to state-of-the-art knowledge? For both special issues some 40 contributions were received from the United States, Europe, and Asia, which were anonymously reviewed by more than 80 scholars around the world. No other academic journals have ever devoted themselves to the issue of global transfer of management knowledge. Hence, one of the aims was to gather potentially important contributions and let them stand together in order to reveal the breadth and complexity of the subject matter. This subject matter was extremely diverse, ranging from crosscultural training interventions to knowledge orientation in Russian enterprises, from theoretical models of knowledge transfer to management education in Australia. What was evident from all these contributions is that there is a general recognition of the importance of effective knowledge transfer, its highly problematical nature in practice, and the lack of unifying concepts to guide methodologically based investigation. The AME and JMP special issues comprise 13 cases, which combine conceptual insight lodged in practical experience in locales as diverse as China, Russia, Poland, Vietnam, and Africa. The selected cases represent the most valuable source of up-todate academic endeavor in the field of the global transfer of knowledge with a strong focus on the nature of interorganizational and interpersonal interactions and their consequences. The editors attempted in their respective introductions to synthesize the insights as practical challenges to management and as pointers to rich research topics. This chapter reflects those motivations.

ANTICIPATION IN SUCCESSFUL KNOWLEDGE TRANSFER Of 13 cases published in the two special issues, 6 have been selected for this chapter in order to illustrate both a major insight as well as a major management challenge. The main criteria for selection of the six cases were as follows: (1) There should have been obvious interest on the supplying and receiving ends to have up-to-date management knowledge transferred; (2) Taken together the cases should overlap as to the time range of efforts and together provide a “full cycle picture”; (3) The cases should cover

Cultural Stretch experiences from different regions of the world; and (4) The cases should reflect failure and success. This refers to the fact that, when headquarters attempt to impose their knowledge on other cultures in an overtly tutorial manner, there is a very strong probability of encountering resistance at the receiving end, also due to a conflict of interest. The six cases reveal that resistance is often unanticipated by the providers of knowledge. Success is achieved only if providers of knowledge are willing to modify their attitude and approaches and engage constructively with local counterparts. The passage of 18–24 months seems to be significant. If there is one clear message that emerges from the cases discussed (albeit briefly) in this chapter it is that the successful transfer of knowledge as an international activity requires of managers a competence that is rarely mentioned, certainly not a topic in management education, yet crucial when knowledge moves into new cultural contexts. This precious competence is anticipation, and the cases show that a failure to anticipate often catches management off its guard and can knock strategies off course for years. Of particular concern then to the KM community and the wider community of management scholarship is to account for the impact of cultural factors on knowledge transfer activities. The fact that the JMP authors were required to discuss knowledge transfer from the point of view of both application and absorption meant that they were able to highlight subtleties and nuances that appear to be disconcerting in practice, yet were considered to be of minor significance to KM researchers. One such issue concerns the language barrier, a habitually undervalued and misunderstood influence on cross-cultural knowledge transfer in specialist literature shaped by authors whose native language is, unhelpfully, English. To place the core message of the contents of these journals in context, this chapter will begin with some general considerations about approaches to cross-cultural KM.

CROSS-CULTURAL KNOWLEDGE MANAGEMENT MODELS AND SCHEMES At risk of oversimplification it can be said that the KM literature is dominated by two approaches, which treat the topic in theory and practice from strongly contrasting positions. For Japanese scholars Nonaka and Takeuchi (1995), the key issue is knowledge creation, whereby firms convert tacit knowledge into explicit knowledge and vice versa through interaction processes, which are briefly discussed subsequently. Despite the considerable influence of the work of Nonaka and Takeuchi, which embodies a specifically Japanese but more generally an oriental approach to KM, the Western (i.e., North American and European) contributions emphasize knowledge transfer as a more consciously explicit process. Nonaka and Takeuchi state the distinction as follows: The realization that knowledge is the new competitive resource has hit the West like lightning. But all this talk about the importance of knowledge—for both companies and countries—does little to help us understand how knowledge gets created. Despite all the attention by leading observers of business and society, none of them has really examined the mechanisms and processes by which knowledge is created. This distinction is what separates the Japanese approach from theirs. More important, it is for this reason that the Japanese experience is especially interesting and useful.

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Cross-Cultural Perspectives on Knowledge Management There is a reason why Western observers tend not to address the issue of organizational knowledge creation. They take for granted a view of the organization as a machine for ‘information processing’. This view is deeply ingrained in the traditions of Western management, from Frederick Taylor to Herbert Simon. And is it a view of knowledge as necessarily “explicit”—something formal and systematic. Explicit knowledge can be expressed in words and numbers, and easily communicated and shared in the form of hard data, scientific formulae, codified procedures, or universal principles. Thus knowledge is viewed synonymously with a computer code, a chemical formula, or a set of general rules. (Nonaka and Takeuchi (1997, 7–8)

Nonaka and Takeuchi (1995) based their theory of knowledge creation on the general distinction between tacit knowledge (hidden, implicit, embedded, and not codified) and explicit knowledge (codified, explicitly expressed, outspoken, written text). They assumed that the most important knowledge in a firm is tacit knowledge, because tacit knowledge is unique to the firm and difficult to transfer—hence in the sense of the resource-based view also difficult to copy (Barney 1991, 1997). To create new knowledge tacit knowledge has to be made explicit, transferred, combined with other available knowledge, and reconverted (internalized) into new tacit knowledge. They suggested in their famous model four stages in a sort of circular (or spiral) process of knowledge creation: • • • •

Tacit—tacit transfer (Socialization) Tacit—explicit conversion and transfer (Externalization) Explicit—explicit transfer (Combination), and Explicit—tacit transfer and conversion (Internalization).

At the end of these four stages, the process begins again at the socialization stage. However, as Glisby and Holden (2002) have argued, all four modes are culturedependent, each reflecting well-documented aspects of Japanese organizational behavior. Their critique reflects a conviction that the cultural context variously influences what is understood by tacit or explicit knowledge, and how either mode of knowledge can be communicated, perceived, and absorbed. What for Americans or West Europeans may be clear and explicit is not necessarily so for East Europeans or Asian people, who need (1) additional tacit information in order to accept or understand the explicit component, or (2) explicit explanations to understand the tacit. By stressing the Japaneseness of the Nonaka/Takeuchi model, Glisby and Holden (2002) remind us that their conception cannot be used indiscriminately to throw light on cross-cultural knowledge creation behavior involving non-Japanese protagonists. The typology of Gupta and Govindarajan (2000) helps us to combat this limitation. It shows us that the effectiveness of knowledge transfer within each of Nonaka and Takeuchi’s four modes is conditioned to a greater or lesser extent by five factors: • • • • •

The perceived value of knowledge The motivation to share knowledge The richness of communication channels The motivation to learn and adopt new knowledge The ability to recognize the value of new knowledge.

These five factors are regarded as representing essential preconditions for the successful transfer of management knowledge and especially in cross-cultural contexts. It is, however, important to grasp that the quality of each of the five factors is in practice

Cultural Stretch determined by the context of the interaction. As is made evident in the following text, the selected cases make it abundantly clear that perceptions of knowledge and the motivations to share or adopt it were powerfully influenced by contextual factors such as resistance to accepting knowledge from outside one’s own ambience and lack of appreciation of the role of tacit knowledge as a catalyst for facilitating the transfer of explicit knowledge. It is important not to see the Gupta/Govindarajan typology as an alternative to the Nonaka/Takeuchi model. Rather, the two schemes are complementary. The Nonaka/ Takeuchi model emphasizes the need of conversion of tacit knowledge into explicit and after transformation back into tacit knowledge. In that sense tacit and explicit knowledge are complementary. The model also stresses the importance of human relationships in organizational settings and, through amply referring to practices in Japan, selective elements of the model became rather culture dependent. The Gupta/Govindarajan typology is concerned with knowledge transfer at the strategic level. It is culture-neutral and strongly emphasizes motivational aspects, but it lacks recognition of the importance of tacit knowledge to complement explicit knowledge. All six cases selected embrace aspects of the Gupta/Govindarajan model and highlight the importance of tacit knowledge; however, they also indicate the importance of an atmosphere conducive to establish rich communication channels (Holden 2002). All this reinforces the conviction that the mere possession of knowledge and the capacity, thanks to modern communication technologies, to transmit it to multiple users does not by itself ensure genuine transfer. For his part, Holden (2002) has demonstrated that a psychological and emotional component, which he calls atmosphere, is a vital factor in energizing the flow of knowledge across individuals. He defines atmosphere as “a pervasive feeling, which is derived from experience and serves as a determinant of expectations concerning future cooperation, about a business relationship or group activity such as collaborative learning or knowledge sharing” (Holden 2002, 315).

KNOWLEDGE TRANSFER IS NEVER LINEAR The six cases selected reveal the value of the Gupta/Govindarajan model as well as the concept of atmosphere, whose significance for the study of knowledge transfer in crosscultural situations is not yet fully appreciated. The cases make it plain that knowledge transfer activities—no matter how systematically planned—do not follow a linear logic. This is an extremely troublesome issue, as it highlights a major challenge in the global transfer of management knowledge: namely, the very precariousness of the activity as a management practice, involving weaknesses in (1) planning and co-coordinating cross-cultural knowledge exchanges, and (2) anticipating the manifold causes of forms of knowledge distortion and the nature of their impact on operations. The latter point is extremely important. In complex ways cultural differences can impede the straightforward cross-cultural transfer of management knowledge, but it is folly to attribute to culture, as popularly understood, some inherently pernicious features that willy-nilly undermine corporate endeavor. The argument being advanced here is that the management failure to anticipate in what ways cross-cultural business interactions may evolve contrary to plans and assumptions is a prime cause of stress and strain in the global transfer of management knowledge.

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Cross-Cultural Perspectives on Knowledge Management Although top managers of large corporations often claim that they are reducing complexity within their firm, it would be naïve to assume that managers can make cultural difference disappear. We conclude that complexity cannot be eliminated; it only can be shifted. Thus managers who find it burdensome or tiresome dealing with cultural diversity often transfer this task to local managers in firms’ networks. This practice can be called cultural stretch, referring to the challenge whereby individuals or groups of people adjust their behavior to suit the demands of working simultaneously with various sets of cultural values and norms in order to meet organizational goals. This calls for alignment with the headquarters’ requirements alongside the norms and values embedded in manifold stakeholder cultures.

KNOWLEDGE TRANSFER AND RESISTANCE TO ABSORPTION For this chapter, six cases have been selected to provide other key learning points, which were derived from the specific context of investigation yet which may have applicability in completely different knowledge sharing scenarios. These cases also suggest that the available theories briefly sketched above could have served as guideposts for effective knowledge transfer and that setbacks could have been avoided with appropriate preparation. As a communality, the cases make clear that knowledge transfer processes will take years rather than weeks or months, encountering many forms of unanticipated resistance, and that the transfer process cannot be hurried. The antidote appears to be trust, but in cross-cultural environments, that too takes time. Trust seems to be established only when people at the receiving end are given voice as equal partners. May, Puffer, and McCarthy (2005) were engaged in establishing Western-style management training in Russia, a country that is still in awkward transition to market economy. Initially equipped with enthusiasm and the best intentions the U.S. trainers soon had to face the fact that what they considered to be important knowledge was not wanted by the Russian managers, who initially were eager to gain superior U.S. management knowledge but could not cope with what was offered to them. Not long after the collapse of the initial training program, another attempt was started, in which strong emphasis was put on identifying the “right people”: those young, ambitious, but mostly inexperienced managers who were able and willing to learn from scratch and were not burdened with previously important knowledge. Here the Gupta/Govindarajan (2000) typology can be usefully invoked. It helps to explain why American trainers found themselves confronted with an unexpected demotivation on the part of the Russians about the way in which the knowledge was being imparted, and about its value and relevance for Russia. The clash was so sharp that the U.S. attempts to train Russian managers came to an abrupt halt.

CONTEXTUAL KNOWLEDGE IS NOT GAINED OVERNIGHT The authors who report their own experience had to learn that for the delivery of management know-how to non-Western countries, it is of paramount importance to (1) adapt a given set of tools to fit for a specific subset of people of the other national culture and (2) be able to transfer these tools to preidentified people who are equipped with the required personality traits and consequently could be successfully selected as course

Cultural Stretch participants. Their case emphasizes the importance of designing appropriate strategies for selecting people from transitional economies as potential receivers of the knowledge that the Americans could offer. A further prominent factor is that the educators should be not only context-sensitive but also fully conversant with the cultural and institutional background, and that is a type of knowledge not gained overnight. The truth of that observation is amply supported in the contribution of Javidan and his coauthors (2005), who describe rapidly deteriorating interactions involving a North European business school and a large South Asian corporation. The Asian Bank commissioned the business school to design and run a major executive program, but scarcely had this started when bitter recriminations blocked the knowledge transfer. After a short while, Asian participants and their supervisors found out that that the knowledge about leadership management provided by the Nordic scholars would not fit into the local corporate culture settings. Thus, their motivation to learn subsided. Instead of seeking clarification in communication about the emerging issues, the Nordic scholars also quickly lost their motivation to share their knowledge with the Asian bank staff. Guided by the Gupta/Govindarajan (2000) model, one may say that both sides—the Nordic Europeans and the top management of the Asian Bank—did not even think about establishing rich communication channels between them. This paper also alerts us to the importance of Holden’s (2002) approach, which recommends creating at the outset an atmosphere conducive to cross-cultural knowledge sharing and of the need to see the associated transfer processes as learning opportunities for suppliers and prospective recipients of knowledge.

TRANSFERRING MEANINGLESS MANAGEMENT KNOW-HOW Kuznetsov and Yakavenka (2005) report about large-scale attempts to make available British and other modern Western management textbooks to university teachers in Belarus. They expose a rarely considered aspect of the transfer of Western management know-how to former socialist countries. What emerges is a picture in which Western management texts are perfectly translated into Russian and transferred to the Belarusian context without much adaptation of content to local conditions prevailing in the Belarus economy. As Kuznetsov and Yakavenka report, 40 percent of their sample of Belarus professors are unhappy with the overall style of the texts or question the validity of the translations. Even if they understand every word, they cannot give a meaning to the texts. The authors make it clear that this attempt to transfer management knowledge to Belarus was based on a Western assumption that sufficient absorptive capacity was available to make the process efficient. The reality is rather different, as the case study shows that even after 15 years, the massive sums of money from European and other international sources to support the transition from communism to the market economy in the more easterly lying socialist countries of Europe have only partially succeeded as an exercise in international knowledge transfer. The professors had not the slightest idea about the functioning of Western market economies. Thus, they could not attribute any meaning to texts that reflect a different economic and political reality than that prevailing in Belarus. The conclusion to be drawn is that there would need to be some transfer of tacit knowledge going along with the explicit knowledge provided in the textbooks (cf. Holden and Kortzfleisch 2004).

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Cross-Cultural Perspectives on Knowledge Management In practical terms, this means that the contents of textbooks must be adapted. It cannot be taken for granted that professors and students are familiar with Western business practices, the related concepts, and the societal values that underpin them. It may not be feasible to modify textbooks to fully reflect the reality of one particular former Soviet republic, but authors and their local collaborators ought to be able to find ways to make the contents suit a country experiencing the transition to the market-economy system by referring to other countries in analogous situations. The issue at stake is that explicit knowledge provided with books and author’s guides cannot be grasped without also being complemented by tacit knowledge. This means that publishers can produce textbooks that, through achieving a certain common cognitive ground with readers in countries like Belarus, have a greater chance of being useful. That would fit in with the Gupta/Govindarajan (2000) scheme and the Nonaka/Takeuchi (1995) model. Without socializing among professors from the West and Belarus, there is hardly a chance to get the management knowledge across.

UNDERSTANDING FOREIGN EMPLOYEES AS CULTURAL RESOURCES The issue concerning the gap between expatriates and the local business community is taken a stage further by Vance and Paik (2005, 590), who shift the focus from expatriate managers to “foreign employees being managed at host country operations.” In their case study of “forms of host country national learning for enhanced [multinational corporation (MNC)] absorptive capacity,” they build on the well-established finding that “past research … [generally has failed] … to identify important contributions that can be made by host country nationals to promote the effective transfer of knowledge throughout the multinational organization.” On the basis of an empirical investigation involving 51 managers as informants in 49 different MNC foreign subsidiaries with home bases in France, Japan, Germany, Korea, the United States and the United Kingdom, the authors identify 12 categories of learning needs among host country nationals. The investigation suggests a picture of top management detachment and aloofness vis-à-vis their host country employees and a reluctance to consult and trust these colleagues. Vance and Paik argue that, unless these employees are empowered to receive expatriate knowledge and know-how, their absorptive capacity remains underused and that MNCs need to consider forms of in-house training to align the strategy of the company with the potential of those employees. Companies should not only train their potential expatriates to cope with assignments abroad, but also their local counterparts to be prepared for the cultural gaps with the incoming expatriates. Glisby and Holden (2005) show how a Danish giftware firm achieved a remarkable breakthrough by dispensing with market intermediaries and directly exchanging tacit knowledge between corporate headquarters in Copenhagen and business partners in Japan’s retail sector. The Danish firm seems to have implemented exactly what Vance and Paik (2005) recommend: to have Japanese nationals trained and employed at the corporate headquarters and to serve as intermediaries between the Danish corporate culture and the Japanese local culture. They did this by going to Japan not on a permanent basis, but rather on a temporary basis to contact local firms, to socialize with local

Cultural Stretch counterparts, and to help them understand the tacit and explicit knowledge on which the particular sales strategy of the Danish firm is based. This case is an extremely interesting example of the applicability of the Nonaka-Takeuchi (1005) model to interactions also involving non-Japanese protagonists. The existence of a gulf between detached and aloof headquarters’ managers and expatriates, on the one hand, and their respective host country counterparts, on the other, stresses the need for a conversationalist disposition amongst managers and the need to articulate “rational” and “non-rational” elements in their active discourse. This experience is to be seen in contrast to a traditional sender-receiver model, such as that of Gupta and Govindarajan (2000), which considers KM as a set of objective messages. The intrinsic merits of these messages and the characteristics of the potential adopters are considered to be the sole contributors to the success of knowledge transfer. Such a perception would support the view that strategic implementation of management concepts through power relations is dependent on the capability of key managers to persuade their subordinates to accept a management tool without a mutual understanding of its merits.

CREATING THE ATMOSPHERE FOR TRUST That trust and a positive atmosphere be achieved neither straightforwardly nor within a short period of time is impressively demonstrated by Nancy Napier (2005) on the basis of her 10-year experience with management knowledge transfer to Vietnam. At first she and other Western scholars enjoyed a very brief period of smooth and unchallenged flow of explicit and simple textbook knowledge from foreign experts to Vietnamese professors. Then the process came to an abrupt halt, as the Vietnamese started to claim that “Vietnam was a special case,” resisting the foreigners’ lofty view of their own management knowledge. For the foreigners this shift of behavior was tough to accept. Note that this is the third occasion cited in which there has been an abrupt halt in an attempt to transfer Western management knowledge. Time passed, and committed foreigners became familiar with the internal constraints of the Vietnamese system. Only then could they build trust and began to learn from the Vietnamese. As a result both sides could open up to each other again. The foreigners were no longer just mentors, but actually became colleagues. Intriguingly, the actual turning point was marked by an open confrontation between the Vietnamese and their foreign colleagues. This confrontation became possible only after the foreigners had become perceived as partners who were prepared to operate within the constraints of Vietnamese culture. Extending on her earlier writings and that of Holden (2002), Gupta and Govindarajan (2000) and others, Napier identifies four core elements as a framework of analysis: (1) the stages of the relationship; (2) participative competence—to be applied to senders and receivers alike about their ability, motivation, and understanding of knowledge; (3) organizational atmosphere—between and within organizations on both sides; and (4) conduit conditions that facilitate the ease or difficulty of knowledge flows. It is worth highlighting a notable feature of Napier’s paper: its description of how radical system change in Vietnam induced a collective culture shock (Fink and Feichtinger 1998; Fink and Holden 2002), which expressed itself in learned helplessness

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Cross-Cultural Perspectives on Knowledge Management (Garber and Seligman 1980) and skepticism about rewards to be given for personal efforts and achievements. It was frequently observed that it took 18–24 months before the Vietnamese were willing and able to make their own decisions.

REDUCING AND INCREASING ABSORPTIVE CAPACITY The six cases highlighted in this chapter cover experiences across three continents. It is striking how the six sets of authors point to a failure on the part of “knowledge deliverers”—whether the West as a source of management know-how or a corporation handling relationships with its subsidiaries—to take account of attitudes, feelings, and specific features at the receiving end. In the context of the selected cases such features range from the intelligibility and perceived value of Western management texts to a sense of affront in host country subsidiaries at not being trusted by top management in a remote head office. Either way, the transfer of knowledge is rendered difficult. Self-esteem is damaged; absorptive capacity lies dormant. As it happens, all authors of the six cases contend that patience, training, and human resource development methods are called for. This is, of course, easier said than done. The scope and specialization of such interventions go far beyond what is customarily available in cross-cultural management education. While that particular challenge goes unmet and possibly unrecognized, it must be expected given that we live in a world in which knowledge sharing remains a great buzzword but is habitually compromised by a heavy-handed and frequently power-based approach. As already noted, the transfer of management knowledge takes time—often years. The more detailed and thorough the preparation was, the less likely the emergence of intractable problems. Part of the preparation involves the nature of the knowledge and recognition that the transfer process itself is part of the knowledge received. Thus, the design of the transfer process to suit recipients and potential beneficiaries is of vital importance. Here, it is important to recognize that every explicit knowledge transfer needs to be complemented by a tacit component, and vice versa. Otherwise, even if texts are perfectly translated and retranslated, prospective recipients of the explicit messages may understand every word in either language but still have problems making sense of the communicated management knowledge, because the context from which the knowledge is derived remains unknown. The transfer of management know-how is heavily dependent on how the values, attitudes, competences, and personality traits enmesh with each other. Finding or developing the appropriate people can be very difficult—sometimes an impossibility. If people are involved who are inappropriately qualified to handle the related cross-cultural issues, any attempt to transfer management know-how is counterproductive. If the transfer of management know-how involves uniform procedures, local or regional management is likely to establish its own informal subsystems and routines. This occurs not as an act of defiance, but as an attempt to modify those procedures so that they are better received at the local end. If headquarters cannot supply solutions that serve the needs of subsidiaries, the management role of headquarters has to be questioned. The absorptive capacity of local managers can be greatly enhanced if they—as prospective recipients of new management knowledge provided by headquarters—are given a chance to gain insights into and understanding of the cultures from which that

Cultural Stretch knowledge emerges. Expatriates sent to distant subsidiaries can successfully serve as knowledge mediators if they do not separate themselves from the local business community and socialize with local people—in other words, showing interest in and respect for the local culture, and investing in building relationships and trust with local managers. Cultural stretch—the reaching out across boundaries of language and culture—can be left to the local managers, but can also be the responsibility of headquarters. Cultural stretch is a key component of the accommodating approach mentioned previously. The following is a synopsis of the key learning points to emerge from the cases under consideration: • •

•

•

•

Major knowledge transfer processes across different nations or cultures may take seven years to come to fruition. Initial optimism may be high, but there is a strong probability of confrontation and resistance if senders and prospective receivers of knowledge do not conscientiously strive to establish rich communication channels between each other. Resistance may be the result of cross-cultural miscommunication or clashes of interest. Either way, it may take 18 months or longer to overcome standoffs. In such cases socialization of senders and receivers of knowledge seems to be indispensable, because tacit and explicit knowledge are complementary and tacit knowledge can only be transferred by socialization. Socialization, as stressed in the Nonaka/Takeuchi model (1995), and motivation, as specified in the Gupta/Govindarajan typology (2000), play a key role. Both are significant factors in the creation of an atmosphere conducive to interchange between senders and receivers (Holden 2002). Transfer of purely explicit knowledge across cultures is bound to fail if the prospective receivers are not able or willing to fully understand the context whence this knowledge is derived—that is, they already have tacit knowledge about the sender’s context and culture. The sending culture may have to be prepared to learn from the receiving culture (Napier 2005).

DISCUSSION The cases described here have given some insights into some important questions for cross-cultural KM practice. These include the following: • • • •

Why context/culture specific management knowledge is changing its meaning when traveling Why teachers of management knowledge, which come from another culture, need to find the “right people” for what they teach Why corporations, which want to harmonize their management practices and reduce complexity, need to find the right people for redesigned tasks, and Why transfer of a successful management practice embedded in production technology is bound to fail if the right people cannot be found within the required time span or simply do not exist in a given society.

It is clear that neither the models of Nonaka and Takeuchi, on the one hand, nor of Gupta and Govindarajan, on the other, can embrace these factors, much less suggest practical solutions to problems which these very models anticipate. No model is capable of subsuming all key factors in a simplified format. All this presents KM theorists with a very tricky challenge because, according to the nature of the context, some factors may

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Cross-Cultural Perspectives on Knowledge Management acquire a disproportionate significance and sometimes a disproportionate insignificance. To take a simple yet very familiar example: the capability to operate in languages other than other English is largely insignificant to the businesspeople of English-speaking countries, but to businesspeople whose native language is not English, foreign language knowledge is not only significant, it is a sine qua non of their operational effectiveness. The unilateral transfer of management knowledge (i.e., the imposition of new management knowledge on staff and local managers in another culture) has the effect of seriously depleting valuable knowledge—much of it of the valuable tacit kind—acquired by managers and staff at the local level. These personnel become recipients of knowledge, which is judged by headquarters to be highly context-relevant, but the acts of absorbing it may mean abandoning previously held ways of perceiving, thinking, judging, and acting that were considered normal and self-evident, even obligatory. This proves to be a painful and demotivating experience, presenting individuals with various challenges: • • • • •

To learn the new management rules and to comply with those rules To behave differently as the still valid values of their society would imply To adjust their personality profiles to fit with the prevailing values of the society and the new value profiles of the firm To cope with the changes within the organization, and what they imply for the social groups they belong to and for their private life To redefine their own personality and their notion of privacy

It would be utterly naïve to expect that these changes can take place within a short period. Imposing completely new management practices on people may largely destroy what so far has given orientation to people and what used to be the foundation of their personal identity inside and outside the organization. It has been emphasized several times in this chapter the importance of establishing a conducive atmosphere for creating trust as a prerequisite of cooperative knowledge sharing. Insofar as this observation enshrines a truth, it was noticeable how Western knowledge deliverers tended to ignore it. Indeed, they ignored it so comprehensively in some cases that cross-cultural interactions came to a complete halt. Such eventualities were not anticipated, just as it was seldom anticipated how less blatant forms of resistance could undermine business strategies. It is worth noting that strategies, in the way in which they are formulated and discussed, have a strongly explicit character. What unsettles them in the domain of knowledge transfer is the impact of the tacit in the form of contextually influenced indifference, resistance, and occasionally even outrage. These by no means uncommon reactions take management—especially management at headquarters—by surprise. There is no known antidote to this condition as long as corporate management surveys the world from headquarters and not from multiplicities of local standpoints.

CONCLUDING REMARKS There is no straightforward transfer of management knowledge. On the one hand, successful transfer is subject to numerous preconditions as to the perceived value of the knowledge, the motivation of the knowledge providers, the esteem that the provided knowledge enjoys, and the capabilities of recipients to understand and absorb the offered knowledge. On the other hand, the transfer of management knowledge may cut

Cultural Stretch deeply into the existing structures of values and norms of behavior, which are valid in the recipient societies. The adoption of the new management practices has severe consequences for the identity of the affected people. New definitions are required of social values, of norms of behavior, and of what privacy means to people. Major changes in management practice may therefore bring into the public domain what hitherto had been held to belong to the private sphere. Out of this springs a further observation, which may have positive implications for our understanding of good practice. The way in which good practice is mediated by communication between headquarters and local management and staff and training of local people across languages and cultures is an intrinsic part of the practice as far as recipients are concerned. The case discussed by May, Puffer, and McCarthy (2005) suggests that learning depends on prior unlearning on the side of the trainers and the trainees. Trainers must adapt their training techniques and know-how by considering the local absorptive capacities and by finding ways and means to identify those local people who fit the qualifications and personality profiles required by the new management know-how. One of the great challenges imposed on staff and managers by cross border management knowledge transfer is the necessity of “unfreezing elements in their backgrounds inhibiting their receptivity to learning market-oriented practices” (May, Puffer, and McCarthy 2005, 25). This is by no means the first reference in the KM literature to the importance of unlearning practices and skills for which there is no longer any call. But it is always the others—our colleagues in Moscow or Beijing or Lusaka—who are expected to unfreeze elements in their background. Yet we must learn to unfreeze the equivalent elements in ourselves too (Glisby and Holden 2005; Napier 2005). Otherwise, those all too misplaced ethnocentric assumptions about the superiority of Western methods are merely replicated to our own detriment. In other words, to impose exclusively the good practices of other cultures’ headquarters is tantamount to renouncing local or regional knowledge. Thus, knowledge is reduced to what can be applied across many nations. Although this may reduce complexity within a large firm and will enhance headquarters’ control, it has the effect of increasing the psychic distance between the whole organization and its markets located in culturally diverse socioeconomic environments. In the long run, this constraint on knowledge leveraging will give room to newly emerging competitors that can better deal with local requirements. Cross-culturally, then, from the cases here it seems likely that there is no such thing as a universal best practice; it is relative to those involved in transferring, receiving, and implementing. As has been shown, when a best practice migrates, its quality and perceived usefulness and applicability change. It becomes something different from what was originally conceived. In utterly contrasting ways, this reality was recognized by all the authors mentioned. There is no firm that stands as an unequivocal benchmark for other corporations; as with all other forms of communication there are countervailing influences, whose provenance, Promethean forms, and effects including economic consequences continually take managers by surprise. In fact, if there is one factor that links most of the contributions principally discussed in this chapter, it is that the cultural impacts on cross-cultural knowledge sharing activities repeatedly also catch managers—often at senior levels—off guard and, in some cases, throw corporate strategies off course for years.

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REFERENCES Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management 17(1): 99–120. . 1997. Gaining and sustaining competitive advantages. Reading, MA: Addison-Wesley. Fink, G., and C. Feichtinger 1998. Towards a theory of collective culture shock. Journal of Contemporary Management Issues 3 (2): 1–134. Fink, G., and N. Holden 2002. Collective culture shock: contrastive reactions to radical systemic change. IEF Working Paper 45(October). Fink, G., and N. Holden, eds. 2005a. Special Issue: Global transfer of management knowledge. The Academy of Management Executive 19 (2). . 2005b. Special Issue: Absorption and application of management knowledge. Journal of Managerial Psychology (November). Garber, J., and M. E. P. Seligman, eds. 1980. Human helplessness theory and applications. New York: Academic Press. Glisby, M., and N. Holden 2002. Contextual constraints in knowledge management theory: The cultural embeddedness of Nonaka’s knowledge-creating company. Knowledge and Process Management 10 (2): 1–8. . 2005. Applying knowledge management concepts to the supply chain: How a Danish firm achieved a remarkable breakthrough in Japan. The Academy of Management Executive 19 (2): 85–89. Gupta, A. K., and V. Govindarajan 2000. Knowledge flows within multinational companies. Strategic Management Journal 21 (4): 473–96. Holden, N. J. 2002. Cross-cultural management: A knowledge management perspective. Upper Saddle River, NJ: Financial Times/Prentice Hall. Holden, N. J., and H.F.O. Von Kortzfleisch 2004. Why cross-cultural knowledge transfer is a form of translation in more ways than you think. Knowledge and Process Management 11. www. interscience.wiley.com Javidan, M., G. K. Stahl, F. Brodbeck, and C. P.M. Wilderom 2005. Cross-border transfer of knowledge: cultural lessons from Project GLOBE. The Academy of Management Executive 19 (2): 59–76. Kuznetsov, A., and H. Yakavenka 2005. Barriers to the absorption of management knowledge in Belarus. Journal of Managerial Psychology, 20 (7): 566–77. May, R. C., S. M. Puffer, and D. J. McCarthy 2005. Transferring management knowledge to Russia: A culturally based approach. The Academy of Management Executive 19 (2): 24–35. Napier, N. 2005. Knowledge transfer in Vietnam: Starts, stops, and loops. Journal of Managerial Psychology 20 (7): 621–36. Nonaka, I., and H. Takeuchi 1995. The knowledge-creating company. New York: Oxford University Press. Vance, C. M., and Y. Paik 2005. Forms of host country national learning for enhanced MNC absorptive capacity. Journal of Managerial Psychology, 20 (7): 590–606.

5 From Concept to Context: Toward SocialCultural Awareness and Responsibility in the Organization of Knowledge Chern Li Liew

ABSTRACT Human language, and by extension, information and knowledge is subjective and contextually biased—created within certain ideological, organizational and sociocultural contexts. Forcing diverse contexts to accept a single representational vocabulary or universal classificatory structure as the medium for discourse across boundaries would be detrimental to the process of supporting cross-domain and cross-cultural information retrieval (IR) in the networked environment as it is inevitable that certain views and perspectives would be misrepresented or underrepresented. A more productive approach would seek to support free and open dialog across competing heterogeneous contexts in the knowledge discovery (KD) environment. In this chapter, the author maintains that a hermeneutic approach provides a promising avenue for addressing some major limitations of existing means of organizing knowledge for cross-domain and cross-cultural IR and KD.

INTRODUCTION: KNOWLEDGE SHARING ACROSS CULTURES The need to share information and knowledge across organizational and national boundaries has prompted the emergence of highly distributed knowledge systems. These systems are increasingly shared by different communities including most, if not all, nations, languages, and cultures in the world. Part of the widespread appeal of the Web, for instance, lies in its potential as a platform that allows the integration of information from diverse sources and as a system that supports cross-domain, cross-lingual and cross-cultural information retrieval (IR) and knowledge discovery (KD). Ideally, the linguistic component devised to facilitate retrieval of resources from highly distributed

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Cross-Cultural Perspectives on Knowledge Management knowledge systems ought to be logically and practically multinational, multilingual, and multicultural in scope and nature in order to support successful knowledge management (KM) across different cultures. Creating and maintaining knowledge and its social and cultural context is vital. One of the most important aspects of a KM system is that it becomes what Thomas, Kellogg, and Erickson (2001) termed a ‘knowledge community’. Such a system will become a place within which users from different backgrounds will use, discover, and manipulate the KM environment. Thomas, Kellogg, and Erickson (2001) discuss two approaches for supporting such knowledge communities—namely, social computing and knowledge socialization. KM is a complex undertaking that involves human as well as social and cultural issues. Particularly in a networked environment, KM is no longer restricted to mere technology-related decisions. The process of supporting knowledge sharing requires a holistic perspective that encompasses human goals, processes, technologies, and the associated contexts. A greater understanding of how to design socially and culturally transparent systems is needed. This chapter reflects on two major questions related to subject access systems in the era of networked information. In a context of global exchanges, are resources in knowledge systems organized in such a way as to maximize efficiency of retrieval and to facilitate context-sensitive KD? Do knowledge organization (KO) systems such as thesauri, classification schemes, subject heading lists, and ontology reflect the views and interests of the different user communities in the global information society? This chapter examines problems specifically related to cross-domain and cross-cultural IR and KD. The focus is on putting forward an argument that a hermeneutic approach provides a promising avenue for addressing some major limitations of existing KO systems in dealing with cross-domain and cross-cultural IR and KD. To make the most effective contribution in dealing with the richness of the networked information society, KM systems must move beyond using a single representational language (or on occasions, using more than one representation system) to a solution that combines the different worldviews and interests of different user communities that make up the global information society.

KNOWLEDGE ORGANIZATION Taylor (1999, 280) states, “We organize because we need to retrieve,” whereas Svenonius (2000, 255) proposes that “the essential and defining objective of a system for organizing information … is to bring essentially like information together and to differentiate what is not exactly alike.” The profound changes introduced by the Internet have increased the concerns around KO and KD. Quite suddenly, we find KO systems at the multiple crossroads of the overcrowded and distributed information landscape brought about by the Web. To provide a better sense of the digital information spaces on the Internet, various KO tools have been considered— ranging from traditional library classification tools to the more advanced forms of semantic tools. The distributed computing environment has evidently brought forth the trend toward higher levels of abstraction and more formalized ontological support. The concept of ontology is very close to the library concept of KO—the space where subject headings, thesauri, classification schemes, and other controlled vocabularies for IR have been developed (Soergel 1999). In recent years, ontology developments have

From Concept to Context emerged from academic obscurity into mainstream business and practice on the Web (McGuiness 2001). Interoperability has become an increasingly crucial aspect (Arms et al. 2002). The evolution from simple syntax and structure to semantics is well illustrated by the semantic Web movement (Berners-Lee, Hendler, and Lassila 2001) and all the developments around it. All of these trends convey changes in systems paradigms, raising new base concepts such as composability, in which components tend to be system independent, adaptable, extendable, and reusable. KO tools are one among the many types of information components envisaged by distributed, interoperable systems. The use of common, shared controlled vocabularies is of utmost importance to convey explicit and shareable knowledge representations in a distributed environment. Most of these formal languages, however, have not been developed as practical solutions for adaptability, extensibility, interoperability, and reusability across different cultures. Previous research has investigated the tensions between standardization and flexibility as key design factors of information infrastructure. Some argue that standardized classification is the key to successful networked computing environments (Degen et al. 2001; Guarino 1998; Jackson, Reichgelt, and van Harmelen 1989; Smith 2003), whereas others point out that the search and retrieval model based on such infrastructure is too simplistic, illogical, and mechanical to describe and accommodate the dynamics taking place when people, communities or groups, and infrastructure come together as resources (Benoit 2002; Capurro 2000: Chalmers 1999; Ghidini and Giunchiglia 2001). One of the main weaknesses of such systems is that communication is inherently one-way, from the systems to the user.

SUBJECT ACCESS IN TURMOIL: KNOWLEDGE ORGANIZATION The goal of supporting cross-domain and cross-cultural IR and KD in the networked global information society has led to various attempts at developing universal classification and KO schemes that would allow for the integration of information from diverse sources, covering different but related conceptual domains. The ideal universal KO scheme that can be used to organize the whole universe of knowledge would be one that is universal, official, and systematic. It is a scheme that would serve to legitimize a single paradigm of worldview that presumes to reflect ontological consensus. The scheme would be carried out within the framework of an established set of principles that governs the concepts and classes as well as relationships of classes, and that it would authorize definition and arrangement of the scheme’s constituent classes through consistent application of these governing principles. Unfortunately, there is not yet such a universal scheme that can classify the chaos of the information resources now available and make information available to everyone in a context-sensitive manner. The following section includes a brief review of the major challenges faced in current efforts to organize information resources for efficient access across different cultural contexts.

A Universal Ordering of Knowledge The ideal of organizing the world’s knowledge in a single consistent scheme is an old one. It dates back to the seventeenth century with Descartes’s concept of a “philosophical

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Cross-Cultural Perspectives on Knowledge Management language” (1972), which aims to reflect the order of all human thoughts. From the late 1960s, many researchers (Brown 1989; Cowan 1997; Ranganathan 1967; Wilkins 1968) started to devise languages that formed the foundation of many of the KO schemes of today. These earlier systems seemed rational; a closer look, however, revealed that categories in their semantic trees were obviously biased by the ideological, political, and sociocultural environment of the time. The same kind of bias afflicts modern day systems. Borges’s (1999) claim that “it is clear that there is no classification of the Universe not being arbitrary and full of conjectures…. If there is a universe, its aim is not conjectured yet; we have not yet conjectured the words, the definitions, the etymologies, the synonyms, from the secret dictionary of God” has since been echoed by many contemporary researchers concerned with the lack of epistemological and sociocultural context in which KO systems have been developed. Current systems have failed to be truly useful to global users because they are based on a faulty epistemological assumption—an objectivistic epistemology that disregards the contextual, subjective, and social aspects of knowledge (Black 1968; Eco 1995), almost enforcing a “Newspeak” (Orwell 1992) solution. To meet the demands of the society envisaged by George Orwell, there was an effort to create a reformed language (i.e., Newspeak), which was simpler but less capable of expressing the ambiguity inherent in different points of view than traditional English. The consequence was that the language became less expressive. KO systems designed along these lines are flawed because, amongst other things, they fail to explicitly recognize a user’s situation and interests (Bowker and Star 1999; Hjǿrland 2002; Lakoff 1987). In most cases only majority views are represented. Minority views are not, underrepresented and/or wrongly reflected and represented in the systems, and users are not made aware of alternative views and meanings.

Knowledge and Context: Unified Classification Systems and Ontology Human language, and by extension information and knowledge, is not static. It neither exists in a vacuum nor substantiates a unitary form determined by a set of normative principles. The human language is inherently social. The complexity of language issues, and hence of controlled vocabularies, has increased with the multi-domain, multilingual, and multicultural requirements of the networked environment. Current KO systems fail to support cross-domain and cross-cultural IR because relevance is connected to meaning, which is contextual. In existing systems, competing contexts are forced to accept a single vocabulary or classification structure as the representational medium for discourse across various boundaries of language, culture, and paradigms. People are not given the opportunity to consider the competing (and at times, conflicting) views and interests to make a context-sensitive judgment. Even systems that have been widely adopted worldwide to organize library resources such as the Library of Congress Subject Headings (LCSH) and classification systems such as the Dewey Decimal Classification (DDC) scheme have failed to be truly universal. These subject heading lists and classification schemes carry with them systematic exclusions or misrepresentation of points of view of ethnic minorities, using language that shows a

From Concept to Context prejudice in favor of particular points of view and against others (Olson 2000; Tamara 1987). They have an emphasis on Western religions (Oh and Yeo 2001) and do not well represent names of other languages and cultures (Sudweek and Ess 2000). The leading critic of the LCSH, Sanford Berman, who wrote Prejudices and antipathies: A tract on the LC subject heads concerning people in 1971 found that 30 years later, no more than half of his suggestions for changes have been adopted and that areas of bias are still prevalent in LCSH (Knowlton 2005). The development of a truly responsive and effective KD system or environment must ensure that diverse, and sometimes competing, contexts are not coerced to accept a single representational vocabulary of universal classificatory structure as the medium for discourse across boundaries. Classification and KO tools (especially those that aim to serve an international community of users) must acquire a new crucial role. Instead of functioning based on objective epistemology and imposing “shared conceptualizations,” these knowledge representation and organization systems ought to support the navigation of not only knowledge topics, but also context-sensitive views and perspectives. To support contextsensitive KD, the KD environment should be a place where users may come to learn in a much more interactive way than merely using information within an enforced paradigm.

TOWARD A HERMENEUTIC APPROACH TO CONTEXT EXPLICATION

Knowledge and Context It is beyond the scope of this chapter to carry out a detailed exploration of the range of contexts that might be necessary in a KD environment. Further exploration of this line of thought is nevertheless both necessary and worthwhile. The question of what kind of contextual information should be included in knowledge repositories can be itself an area of further research. In this section, the relation between knowledge and context is briefly discussed in the light of findings from previous researchers. Within the literature, many definitions of knowledge have context as an important aspect. A selection of these is presented in Table 5.1. Klemke (2000), meanwhile, recommends a holistic understanding of context by means of several dimensions (see Figure 5.1). Context includes the social, cultural, historical, and personal perspectives affecting how a person evaluates and uses information. Context can also be defined as the situational factors surrounding knowledge works. When documents move beyond the boundaries of the local domain in which they have been created, the contextual information that comes with them (such as those listed in Figure 5.1) is not always clear to the users. Hence, contextual information needs to be made explicit so that users in the broader domains can uniquely identify, retrieve, and understand meanings of the information carried by the documents. It is important therefore for context to be considered at the level of knowledge representation and made transparent in the KD environment. In a cross-domain and cross-cultural KD environment, knowledge should at least be considered to comprise both information and user-specific aspects, such as domain knowledge, as well as social and cultural values. The explication of an information

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Table 5.1 Selected definitions of knowledge Literature

Definition

Davenport and Prusak (1998)

“Knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers.”

Sveiby (1997)

Knowledge is the capacity to act within context.

Murray (1996)

“Making the tacit explicit often includes the following activities: … identifying terminology that is clearly understood and using language that is appropriate for the culture and context.”

Nonaka and Takeuchi (1995)

“First, knowledge, unlike information, is about beliefs and commitment…. We consider knowledge as a dynamic human process of justifying personal belief toward the ‘truth.’” (i.e., contextual)

Polanyi (1966)

Tacit knowledge is personal, context-specific, difficult to express in verbal, symbolic, and written form, and therefore hard to formalize and communicate.

Figure 5.1 Klemke’s context typology.

From Concept to Context object’s implicit context, thereby making explicit those meanings, supports a contextsensitive KD. This is essential in KD in a global environment. The appropriate contexts must be made explicit in both representation and organization. An ongoing process of contextualizing and recontextualizing is also required so as to provide a viable infrastructure to support effective KD and knowledge acquisition in a context-sensitive way, both internally within a knowledge domain and externally across the boundaries of conflicting competing domains with different meanings, views, and interests. The exclusion or invisibility of certain communities of users or social worlds in the representational system—that is, a kind of institutional opacity rather than transparency, must be avoided. In the following section, we argue that a hermeneutical approach is a promising avenue for context explication.

Why Hermeneutics? The “real world” is in fact ambiguous to quite a significant degree. People with different theoretical dispositions and agendas have different worldviews. The historian of science T. S. Kuhn (1996) insists that the notion of a deeper, and hence neutral, classificatory scheme is an illusive one. In his view, all classifications are relevant to some theoretical framework and therefore, a so-called deeper (universal) classificatory scheme would not be neutral, but relative only to its own theoretical perspective. In Kuhn’s terms, the absence of a common neutral set of categories to which different categorical schemas could be reduced means that the different schemas are incommensurable with respect to the criteria in relation to which they are evaluated. It should also be noted that, to some extent, even the same terms can sometimes bear different empirical and theoretical meaning in different paradigmatic contexts. This is also the opinion of Bernstein (1983) and Feyerabend (1993). Criteria for data recognition vary with the context of application, even within paradigms. Smith (2003) has also pointed out that even a limited and domain-specific approach to ontology has its problems. He gives the example that even in a domain as limited as finance, any ontology designed to facilitate communication will have to be adjusted to the fact that “objects in the realm of finance, credit, securities, collateral and so on are structured and partitioned in different ways in different cultures” (Smith 2003, 48). Whenever one is forced to apply an ontology to a domain structured by the subtleties of human judgment and local contexts, the requirement that the application of the ontology be adjusted to those subtleties and contexts seems to block the aims of the sort of automatic information processing ontology designers have hoped for. Scientific knowledge and understanding are clearly not strictly rule-governed activities grounded in a set of neutral facts. They depend on crucial junctures of human judgment and interpretations. The aspects of the conventions structuring human knowledge, analysis, synthesis, and application are precisely the dimensions that are central to the Heidegger-Gadamer analysis of the so-called hermeneutic circle (Gadamer 1975; Heidegger 1962). Heidegger distinguishes three modes of people’s involvement with their surroundings: (1) an everyday mode of practical activity, (2) a reflective problem-solving mode, and (3) a theoretical mode. In his now classic example—in picking up a hammer to nail something—Heidegger states that a hermeneutic understanding is already at work.

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Cross-Cultural Perspectives on Knowledge Management Pre-understanding can be constructed into words, but hereby, Heidegger proposes, is the original hermeneutical relation between person and world reified. Knowledge is always situated. The emphasis of the hermeneutical approach is that there is no escape to an absolute view without presuppositions. Human knowledge is always an interpretation of the world—not a pure, perspective-free theory. The literature of philosophical hermeneutics, dealing as it does with communication among people holding different perspectives, has central relevance to the construction and use of ontology and other KO schemes. According to Suchman (1987, 76), “the communicative significance of a linguistic expression is always dependent upon the circumstances of its use. A formal statement not of what the language means in relation to any context, but of what the language-user means in relation to some particular context, requires a description of the context or situation of the utterance itself. And every utterance’s situation comprises an indefinite range of possible relevant features.” Hermeneutic theory is based on accepting the effect of this indefinite, inevitable, and infinitely detailed situational background. Any use of a symbol in a human activity carries with it a set of assumptions, applicability, the people involved, the other information and prior knowledge that they have acquired, their organizational structures, policies and practices, and so on. Each language-user’s interpretation therefore involves their understanding of the original utterance’s content and context, as well as an understanding of other contexts of use of the utterance. Butler (1998) has attempted to categorize hermeneutics and discussed their potential applications to information systems research as follows: • • •

Hermeneutical Theory/Conservative: Uncover original meanings as intended by the author Constructivist or Pragmatic: Enter into the interpretative norms of the community, as well as consider the historical contexts of the interpreter and interpreted Radical or Deconstructionist: Text and social action are treated as an endless play of signs that reveal and conceal knowledge through the play of difference and contradiction

Others have also discussed the relevance of hermeneutics for information science. Winograd and Flores (1986) have proposed that in light of the importance of a hermeneutic analysis of computation and cognition, the communicative function of computers should be given serious recognition. Snodgrass and Coyne (1997) argue that design is not in the domain of natural sciences but belongs to the human and hermeneutical sciences. Rafael Capurro (2000) considers that trying to fit the event of information into a fixed structure is a hopeless enterprise, and argues that an ethically responsible approach to information technology is one that takes into consideration the process of interpretation that is required for the constitution of meaning. Accordingly, Capurro points to the centrality of hermeneutics for the study of information and information science. Chalmers (1999), meanwhile, discusses the importance of interpretation and a hermeneutic approach particularly for IR and in library science literature, and Benoit (2002) devotes a sophisticated review to the analysis of information systems from the point of view of twentieth-century philosophy, including an excellent study of hermeneutics.

From Concept to Context Taking a wider view, this chapter follows in the footsteps of those within hermeneutics that seek a view of knowledge and inquiry that unifies the perspectives of the social, cultural, and natural sciences. More specifically, it is proposed that a hermeneutic approach to KO tool construction and use will facilitate the generation of knowledge through an ongoing process of interpretation (contextualization) and integration (recontextualization)—creating a place where users may come to learn in a much more fundamental way than merely using information within one enforced paradigm.

UNITY IN DIVERSITY: CROSS-CONTEXTUAL KNOWLEDGE DISCOVERY If hermeneutic analysis makes possible a valid characterization of scientific activity, this entails that KO schemas should be designed in the light of the fundamentally hermeneutic character of scientific enterprise. A KO schema should not be considered static; instead it should be flexible and open to development, adjusting to different contexts of application and capable of incorporating new contexts. In an earlier study by Kublik and others (2003), it was pointed out that in the DDC, nursing personnel were not categorized as a subdivision of 610.695, “Specific kinds of medical personnel,” but were instead assigned under the topic of education and research. The authors argued that this classification had resulted in nurses being effectively ghettoized. Users browsing books about the medical professions might not find books about nursing. To accommodate different perspectives, the KO system envisioned would enable the appropriate reorganization and recontextualization, as well as making available comparison of the different perspectives. By designing a hermeneutic context in knowledge representation and KO, we therefore make room for an interactive space—for communication among users who hold different ontologies. Representation of diverse ontology can be a setting within which users with different conceptual schemas can learn to understand one another. A systematic method for automatically detecting and assisting in resolving various semantic conflicts is needed. The proposed framework is different from other ontology frameworks that have been designed to capture domain specific (MacGregor 1991; Mahalingam and Huhns 1997) or commonsense knowledge (Lenat et al. 1990; Storey et al. 1997). The aim of the framework is to support the encoding of extensible knowledge on commonly found semantic conflicts that have been identified. A knowledge organization KO system designed based on this framework, be it an ontology or a classification system for instance, will provide an automatic way of comparing and manipulating contextual knowledge of each information source. The structure of such a system can be as shown in Figure 5.2. A concept is related to instances in that a concept is a generalized abstract term that may have several concrete instances. A concept may have zero or more children, and each concept may be an instance or another concept. The “disjoint” relationship

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Cross-Cultural Perspectives on Knowledge Management Figure 5.2 Structure of a cross-contextual knowledge organization system.

between two concepts indicates that they are not semantically equivalent. The “part-of” relationship is similar to an aggregation in object-oriented data models and semantic such models. The “is-a” relationship, in contrast, is similar to generalization/specialization in such models. The “peer” relationship is used when two concepts are semantically equivalent. It is possible for the two concepts to define one-to-one mapping between all the instances of these two concepts. The disjoint and peer relationships will be useful for mediators to determine if semantic conflicts (especially data-level conflicts) exist, and if they exist, whether these conflicts are resolvable. The purpose of the is-a and part-of relationships is to allow mediators to detect schema-level conflicts (e.g., those that exist between different KO systems). As Elaine Svenonius writes in The Intellectual Foundation of Information Organization (2000), the framework proposed in this chapter “seeks unity in diversity.” Information and concepts are not viewed as static entities but as emergent properties resulting from a subjective, dialogic process of reorganization and recontextualization. KO systems, particularly those purporting to be universal and international, need to be capable of bringing together data and/or documents from different countries and communities, and integrating them within a common scheme that permits the collocation of information and navigation of information spaces in ways that meet the cultural expectations of particular communities, while having an infrastructure that contains the different ontologies.

From Concept to Context A number of characteristics of the KO and KD environment envisioned are as follows: 1. The KO and KD environment envisioned is a space where users assuming different conceptual schemas may come to learn from one another through interaction with each other and with the KO tool. The interaction would involve a back-and-forth process that includes dimensions of interpretation, understanding, and application. 2. The KO system should be based on effective infrastructures that will support productive activity and encourage dialog both internally within a knowledge domain, and externally across the boundaries of competing or conflicting domains. 3. The KO scheme must strive not only to encourage external dialog across the boundaries of overlapping knowledge communities, but also to facilitate the generation of new knowledge internally through interpretation (contextualization) and integration ( recontextualization) within the existing infrastructure of new facts and new observations. 4. The KO system should also have an infrastructure that supports the discovery, explication, visualization, navigation, and use of contexts to stimulate context-sensitive KD, as well as supporting the growth of contextual perspectives within the KO system. 5. Information visualization tools as well as topic maps (http://www.topicmaps.org/) for conceptual and contextual mapping could play a prominent role. 6. Convergence of the different representations and contextualization is not interoperability, but rather a layering of solutions, conventions, and standards.

This framework encourages us to construe KO schemas as representations of the world as present-at-hand where different perspectives meet. Instead of functioning as objective shared conceptualizations, knowledge classifications could be a powerful tool for supporting the growth of each knowledge community’s contextual perspective, and for allowing interoperation between autonomous perspectives shared by the global information society.

APPLICATION OF THE FRAMEWORK TO KNOWLEDGE MANAGEMENT The application of the proposed framework to knowledge organization and knowledge management systems offers the benefit that cultural and administrative barriers to individual and organizational learning are systematically broken down by focusing on related contexts. The tendency of individuals and groups in communities or organizations to self-organize around their interests is supported by and strengthened by embracing knowledge-related contexts that encourage related behaviors. The framework proposed in this chapter explicitly rejects the claim that individuals operating in social environments can produce and integrate knowledge via prescriptive edicts on a sustainable basis. Knowledge is dependent upon, and tied to the context within which its “epistemic culture and machinery” is produced, in the terms formulated by Knorr-Certina (1999). Technology, including knowledge management systems, is not just an exterior force that encroaches upon local, “technologically unspoiled” contexts, although it might be utilized that way. Most of the time, technology participates in the constitution of local contexts. Hasselbladh and Kallinikos (2000) have argued that interpretation constitutes an intrinsic part of the social life process by means of which humans seek to actively

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Cross-Cultural Perspectives on Knowledge Management enact the possibilities inherent in technologies and cross-contextual systems in order to construct particular forms of “actor-hood” in the local settings. It is therefore important to address the issue of who interprets and locally negotiates the meaning and functionality of the technology concerned. It is time to move away from the Newspeak solution and culturally biased knowledge systems to an ethically responsible approach. We must take into account the process of interpretation that is needed for the constitution of meaning. The framework proposed aims to be a starting point for the move toward instilling sociocultural awareness and responsibility in our efforts to organize knowledge for sharing among societies of different cultures.

ACKNOWLEDGMENT Part of this work was presented at the Fourth IADIS International Conference on WWW/Internet 2005, 19–22 October 2005, Lisbon, Portugal.

REFERENCES Arms, W. Y., D. Hillmann, C. Lagoze, D. Krafft, M. Richard, J. Saylor, C. Terrizzi. and H. van de Sompel. 2002. A spectrum of interoperability: The site for science prototype for the NSDL. D-Lib Magazine 8 (1): 9. Benoit, G. 2002. Towards a critical theoretic perspective in information systems. Library Quarterly 72 (4): 444–74. Berman, S. 1971. Prejudices and antipathies: A tract on the LC subject heads concerning people. Metuchen, NJ: Scarecrow Press. Berners-Lee, T., J. Hendler, and O. Lassila. 2001. The semantic Web, http://www.sciam.com/ 2001/0501issue/0501berners-lee.html. Bernstein, R. J. 1983. Beyond objectivism and relativism: Science, hermeneutics, and praxis. Philadelphia: University of Pennsylvania Press. Black, M. 1968. Can language reflect reality? The labyrinth of language. http://www.rick.harrison. net/langlab/reality.html. Borges, J. L. 1999. The analytical language of John Wilkin. Trans. L. G. Vazquez, http://www. alamut.com/subj/artiface/language/johnWilkins.html. Bowker, G. C., and S. L. Star. 1999. Sorting things out: Classification and its consequences. Cambridge, MA: MIT Press. Brown, J. 1989. Loglan 1: A logical language, 4th ed. Gainesville, FL: Loglan Institute. Butler, T. 1998. Toward a hermeneutic method for interpretative research in information systems. Journal of Information Technology 13:285–300. Capurro, R. 2000. Hermeneutics and the phenomenon of information. In Metaphysics, epistemology, and technology, ed. C. Mitcham, 79–85. New York: JAI. Chalmers, M. 1999. Comparing information access approaches. Journal of the American Society for Information Science and Technology 50 (12): 1108–18. Cowan, J. W. 1997. The complete Lojban language. Fairfax, VA: Logical Language Group. Davenport, T. H., and L. Prusak. 1998. Working knowledge: How organizations manage what they know. Boston: Harvard Business School Press. Degen, W., B. Heller, H. Herre, and B. Smith. 2001. GOL: A general ontological language. Proceedings of 2001 Conference on Formal Ontologies in Information Systems, 34–46. New York: ACM Press.

From Concept to Context Descartes, R. 1972. Traité de l’homme (Treaties of man), trans. T. S. Hall. Cambridge, MA: Harvard University Press. Eco, U. 1995. The search for the perfect language. Oxford: Blackwell. Feyerabend, P. K. Against method, 3rd ed. London: Verso. Gadamer, H.G. 1975. Truth and method. New York: Seabury Press. Ghidini, C. and F. Giunchiglia. 2001. Local models semantics, or contextual reasoning = Locality + Compatibility. Artificial Intelligence 127 (2): 221–59. Guarino, N. 1998. Formal ontology and information systems. In Formal ontology in information systems, ed. N. Guarino, 3–15. Amsterdam: IOS Press. Jackson. P., H. Reichgelt, and F. van Harmelen. 1989. Logic-based knowledge representation. Cambridge, MA: MIT Press. Hasselbladh, H., and J. Kallinikos. 2000. The process of rationalization: A critique and re-appraisal of neo-institutionalism in organizational studies. Organization Studies 21 (4): 697–720. Heidegger, M. 1962. Being and time. New York: Harper. Hjǿrland, B. 2002. Epistemology and the socio-cognitive perspective in information science. Journal of the American Society for Information Science and Technology 53 (4): 257–70. Klemke, R. 2000. Context framework—an open approach to enhance organizational memory systems with context modeling techniques. Proceedings of the Practical Applications of KM (PAKM2000), http://www.fit.fraunhofer.de/gebiete/wissensmanagement/papers/ pakm2000_klemke_ContextFramework.pdf. Knorr-Certina, K. 1999. Epistemic cultures. How the sciences make knowledge. Cambridge, MA: Harvard University Press. Knowlton, S. A. 2005. Three decades since Prejudices and Antipathies: A study of changes in the Library of Congress Subject Headings. Cataloging & Classification Quarterly 40 (2): 123–45. Kublik, A., V. Clevette, D. Ward, and H. A. Olson. 2003. Adapting dominant classifications to particular contexts. Cataloging & Classification Quarterly 37 (1/2): 13–31. Kuhn, T. 1996. The structure of scientific revolutions, 3rd ed. Chicago: University of Chicago Press. Lakoff, G. 1987. Women, fire and dangerous things—What categories reveal about the mind. Chicago: University of Chicago Press. Lenat, D.B., R. V. Guha, K. Pittman, D. Pratt, and M. Shepherd. 1990. CYC: Toward programs with common sense. Communication of ACM 33 (8): 30–49. MacGregor, R. 1991. The evolving technology of classification-based knowledge representation systems. In Principles of semantic networks: Explorations in the representations of knowledge, ed. J. F. Sowa, 385–400. San Mateo, CA: Morgan Kaufmann. Mahalingam, K. and M. N. Huhns. 1997. An ontology tool for query formulation in an agentbased context. Proceedings of Second IFCIS International Conference on Cooperative Information Systems: 170. Washington: IEEE Computer Society. McGuiness, D.L. 2001. Ontologies come of age. http://www.ksl.stanford.edu/people/dlm/papers/ ontologies-come-of-age-mit-press-(with-citation).htm. Murray, P. C. 1996. Information, knowledge, and document management technology. Knowledge Management Briefs 1(2), http://www.ktic.com/topic6/12_INFKM.HTM. Nonaka, I., and H. Takeuchi. 1995. The knowledge-creating company: How Japanese companies create the dynamics of innovation. New York: Oxford University Press. Oh, D-G., and J-S. Yeo. 2001. Suggesting an option for DDC Class Religion (2001) for nations in which religious diversity predominates. Knowledge Organization 28 (2): 75–84. Olson, H, A. 2000. Difference, culture and change: The untapped potential of LCSH. Cataloging & Classification Quarterly 29 (1/2): 53–71.

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Cross-Cultural Perspectives on Knowledge Management Orwell, G. 1992. Nineteen eighty-four. Norwalk, CT: Easton Press. Polanyi, M. 1966. The tacit dimension. Gloucester: Routledge & Kegan Paul. Ranganathan, S. R. 1967. Prolegomena to library classification, 3rd ed. Bombay: Asia Publishing House. Smith, B. 2003. Ontology and information systems. In The Stanford Encyclopedia of Philosophy, ed. E. N. Zalta, 46–52. Stanford, CA: Center for the Study of Language and Information, Stanford University. Snodgrass, A., and R. Coyne. 1997. Is designing hermeneutical? Architectural Review Theory 1 (1): 65–97. Soergel, D. 1999. The rise of ontologies or the reinvention of classification. Journal of the American Society of Information Science 50 (12): 1119–20. Storey, V. C., R.H.L. Chang, D. Dey, R. C. Goldstein, and S. Sundaresan. 1997. Database design with common sense business reasoning and learning. ACM Transaction of Database Systems 22 (4): 471–512. Suchman, L. 1987. Plans and situated actions: The problem of human machine communication. Cambridge: Cambridge University Press. Sudweek, F., and C. Ess, eds. 2000. Cultural attitudes towards technology and communication. Proceedings of Second International Conference on Cultural Attitudes Towards Technology and Communication. Perth, Australia: Murdoch University. Svenonius, E. 2000. The intellectual foundation of information organization. Cambridge, MA: MIT Press. Tamara, L. 1987. Ethno-linguistic misrepresentations of the Alaskan native languages as mirrored in the Library of Congress of cataloging and classification. Cataloging & Classification Quarterly 7 (3): 69–90. Taylor, A. G. 1999. Organization of information. Englewood, CO: Libraries Unlimited. Thomas, J., W. Kellogg, and T. Erickson. 2001. The knowledge management puzzle: Human and social factors in knowledge management. IBM Systems Journal 40 (4): 863–84. Wilkins, J. 1968. An essay towards a real character and a philosophical language. Menston, UK: Scholar Press. Winograd, T., and F. Flores. 1986. Understanding computers and cognition: A new foundation for design. Norwood, NJ: Ablex.

6 Managing Innovative Knowledge: Cultural Perspectives on Patenting Chad Saunders and Mike Chiasson

ABSTRACT This chapter employs a cross-cultural perspective on patenting to explore differences and similarities in the management of innovative knowledge over time. Patents operate at the nexus of individual, legal, political, organizational, and societal interests thus providing a useful vantage point to explore cultural perspectives in the management of knowledge. The discussion includes how culture is implicated in the emerging notions of intellectual property and innovative knowledge, the motivations for managing it, its ownership and the allocation and enforcement of rights to this knowledge. The ongoing debate over the patentability of new innovations (e.g., software, genes) serves to illustrate how cultural differences continue to influence fundamental decisions regarding the management of innovative knowledge. Over time, the management of innovative knowledge has shifted from the communal concerns of localized groups within particular locales, to the individual rights of inventors, and to the global rights of organizations. Although a global patent system facilitates knowledge exchange across cultures by providing common practices upon which knowledge can more freely flow, the universal approach to knowledge management implied in this global system is seen to impede innovation in unintended ways when considered in the context of the diversity of the constituent cultures that inform and are affected by this system.

INTRODUCTION In this chapter, a cross-cultural perspective on patenting is employed to explore differences and similarities in the management of innovative knowledge over time.

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Cross-Cultural Perspectives on Knowledge Management Patents operate at the nexus of individual, legal, political, organizational, and societal interests thus providing a useful vantage point to explore cultural perspectives in the management of knowledge. The discussion includes how culture is implicated in the notion of intellectual property and innovative knowledge, the motivations for managing it, its ownership, and the allocation and enforcement of rights to this knowledge. Over time, the management of innovative knowledge has shifted from the communal concerns of localized groups within particular locales, to the individual rights of inventors, and to the global rights of organizations. Each shift illustrates a complicated and socially constructed balancing of societal, individual, and organizational rights that now favor the international rights of corporations. Patenting institutionalizes the management of specific approaches to innovative knowledge within and across societies. These systems have interacted over time to produce a global system dominated by Western practice. The debate over the patentability of computer-implemented inventions, and in particular software, serves to illustrate how cultural differences continue to influence fundamental decisions regarding the management of innovative knowledge. The motivation for the patenting system has shifted over time, and recent research raises concerns over the universal applicability of patenting across cultures suggesting that cultures with strong support for patenting do not produce more innovations than those without such systems but instead tend to develop innovations of a certain type. The remainder of this chapter explores the ongoing cross-cultural negotiations that occur in the context of patenting with respect to the acceptable types of innovative knowledge, why this knowledge is managed, who owns the knowledge and how is it managed. The implications of these shifts in the patenting systems identified in the first half of the chapter are discussed in the context of a global patent system and the influence of dominant patent jurisdictions on emerging ones. In particular, it is pointed out that countries ill equipped to adopt or adapt this system, through financing and intellectual infrastructure, have numerous barriers to accessing and building on global innovations, which further curtails their ability to participate and contribute. Although a global patent system facilitates knowledge exchange across cultures by providing common practices upon which knowledge can more freely flow, the universal approach to knowledge management implied in this global system is seen to impede innovation in unintended ways when considered in the context of the diversity of the constituent cultures that inform and are affected by this system.

PROPERTY RIGHTS AND PATENTING To understand the acceptable types of innovative knowledge that fall under the purview of patenting, it is useful to consider the historical roots of patenting across several influential cultures through the emergence of the concept of intellectual property as an intangible asset with financial value. The concept of intellectual property, as an intangible property with commercial value, is a relatively recent development accompanying new attitudes toward authorship, craft knowledge, and invention (Long 1991). The origin of property rights lies with ownership and control over physical things like land and cattle; however, over time these rights have extended to include intangibles— assets not directly attributable to physical resources (Carruthers and Ariovich 2004).

Managing Innovative Knowledge Our earliest evidence of a shifting value toward more intangibles lies in the ancient Greek views of authorship. Within these ancient societies, the practice of giving credit for authorship provides insight into the value placed upon this knowledge. The ancients wished to bestow honor on their writers through an explicit recognition of their works. This ancient practice of honoring authors and discouraging theft of writings was to increase the reputation of the author, and not for preventing the larceny of intangible property (Long 1991). Value was placed upon recognizing the contribution of authors, thus the protection offered was for the author’s reputation and stature as an author within society and not direct protection of the work. The rise of craft knowledge within medieval cultures was characterized by the rise of guilds in which the commercial value of intangible practical knowledge was recognized. Medieval societies transmitted craft knowledge through oral tradition and apprenticeship, with many crafts originating from the skills learned out of necessity in the household. With the rise of urbanism, artisan production shifted outside the household to guilds, thus opening craft knowledge beyond the confines of family ties (Long 1991). This close-knit corporation of the guild provided a mechanism for passing the craft knowledge on, while controlling—at least to a certain extent—those with access to the craft knowledge and how it was exploited. When craft knowledge was useful only among those practicing in a household, no explicit attempts were made to maintain the craft knowledge in secrecy since it was only conveyed among the family, and much of the craft knowledge could only be attained through the practice of the craft. Thus secrecy was most likely unintentional, relying on the tacit knowledge exchange gained through practice (Long 1991). From this family focus on the protection of craft knowledge emerged the development of guilds as organizations of artisans based upon particular crafts and technologies. The guilds originally organized to attend to the cult deity, to meet for social events, or to provide burial for poor members of the guild, and did not address economic concerns or intentionally manage craft knowledge (Long 1991). That is, the guild emerged to meet obligations normally handled by the family, but as the guild membership moved beyond family ties toward more commercial interests, the focus of the guild activities moved to concerns over protecting the craft. Craft knowledge as intellectual property emerged as an intangible product with economic value with the rise of medieval cities and the market economies that developed within them (Long 1991). Medieval cultures began to value not only property in the form of physical assets like land but also intangible assets like craft knowledge. The connection between individual authorship and intellectual property was not made until the fifteenth century, first with regard to material inventions and later (in the sixteenth century) with regard to writings (Long 1991). The patent emerged from this conceptualization of intellectual property as having intangible dimensions with economic value. Patents served to convert craft knowledge into property that could be owned and managed. During its inception the patent existed as a limited monopoly awarded locally for novel craft knowledge or for the invention of new devices (Long 1991). European and English patents during the fifteenth and sixteenth centuries consisted of limited monopolies for novel machines and processes on the basis of authorship or possession of knowledge about a particular process. Governments issued patents for these innovations as well as other resources (e.g., land, minerals) with the purpose of promoting economic development and attaining political ends (Long

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Cross-Cultural Perspectives on Knowledge Management 1991). Inventors petitioned for intellectual property rights using the same mechanism used for requesting rights to land or minerals. The inventors argued for the granting of patents based upon claims of tangible benefits of the invention for the economy (i.e., the usefulness of the invention) and not necessarily its newness, which is the focus of today’s patents. Current conceptualizations of what constitutes patentable innovative knowledge are evaluated in terms of the invention’s newness, nonobviousness, and usefulness. This list of criteria has emerged over time, and it is culturally negotiated and disputed both within and across jurisdictions. What constitutes innovative knowledge with respect to newness has shifted over time with the criteria being of little import or based upon a geographic location. The first patents issued in Italy used an urban criterion of newness: Was the invention new to the city? There was little concern whether the person applying for the patent was the inventor or the importer of the technology. Societal norms focused more on the impact of the inventor for the greater good of the city and not necessarily protecting intellectual property rights of the inventor, because the focus was more on the usefulness of the invention. The issue of nonobviousness emerged much later—only after the rights of individual inventors came to the forefront and it became increasingly important to determine ownership of the invention. The culture and laws in which the concepts of ownership are embedded influence what can and cannot be owned. For example, the adoption and enforcement of intellectual property rights in contemporary China has been undercut by the lack of a notion of “property” under Imperial Chinese law and culture (Alford 1995). The contrast with Western cultures that have well-established legal systems to deal with property, both tangible and intangible, based upon an economic system where individual ownership is paramount, serves to highlight the considerable challenge for implementing a Western-style patent system in such a context. Remarkably, that is essentially what exists in China today—however, not without considerable debate over the applicability of such a patent system. Interestingly, many of the concerns raised by the Chinese are similar to those historically raised by other nations as they implemented their own patent systems. High-context cultures like China emphasize relationships, whereas lower-context cultures in the West rely more on contracts. The patent system is now strongly influenced by lower-context cultures, and thus the rules and norms surrounding what is deemed innovative knowledge are driven by these cultural expectations. Debates over the patentability of new types of innovations often challenge cultural norms and prohibitions. Recent debates over the patentability of life forms, genes, and software serve to highlight the differing cultural values that the patenting system crosses. The debate over software patents in the United States illustrates the ongoing dialogue within one jurisdiction. The U.S. Patent and Trademark Office (USPTO) has historically been reluctant to grant patents on computer implemented inventions such as software, and during the 1970s, it avoided granting patents on inventions that utilized calculations made by a computer. Patents could only be granted for processes, machines, articles of manufacture, and compositions of matter and could not be granted to scientific truths, whether expressed mathematically or not. Software was considered to be public mathematical algorithms—not processes or machinery—and thus not patentable. During the 1980s the USPTO shifted its position and began accepting inventions that utilized a generic computing device to implement a new process. That is, software

Managing Innovative Knowledge was patentable if the new business methods defined by the software were implemented using a general-purpose computer. Thus, the patentability of software during this time depended heavily on how the claims outlining what was innovative were drafted by the patent attorney. By the 1990s, following a landmark case involving the patentability of business methods, software was placed within the purview of patentable subject matter within the United States. As a result, the dialog surrounding whether software was patentable changed over time from rejection to acceptance. However, other cultures and nations continue to debate the acceptance of software patents, such as the European Union, where a combination of rhetoric (e.g., “we are not the United States”) and social concerns (i.e., software and business patents offer too much protection) are raised. This issue is revisited later in the chapter in the context of cross-cultural influences and the emergence of a global patenting system. Ironically, jurisdictions like China do not allow patents on software, but if the combination of software and hardware as a whole is an improvement that offers a complete technical solution, then an invention containing a computer program might be patentable. Cultural expectations have influenced the value placed upon certain types of knowledge. Cultures adopting patent protection place increased emphasis on the promotion of the creation of new knowledge. This tends to have the cultural influence on placing primacy on newness and innovation, potentially at the expense of historical practice. In entrepreneurial cultures like the United States, the desire to promote innovation with minimal interference from government institutions like the patent office leaves the inventor—and more recently corporations—to choose which innovative knowledge to develop, protect, and exploit, leaving the open market to decide the usefulness of such efforts. This strong entrepreneurial spirit has over time influenced the United States to relax restrictions on patenting of software, whereas other jurisdictions like Canada, the European Union, and China take a decidedly more cautious approach. The next section explores the cultural influences increasing the reliance on intangible property, and the motivations for patenting.

MOTIVATIONS FOR PATENTING The motivation for managing innovative knowledge is culturally influenced through underlying assumptions that inventors should be rewarded for their creative and technical activity. However, cultural differences in the role of governments in the affairs of their citizens and a growing discomfort with powerful monopolies serve to temper the patent systems within individual countries. The act of invention is considered to require significant effort on the part of the inventor, whereas the duplication of the invention by others is assumed to have minimal effort and risk. Inventors are understandably reluctant to publicly release the details of their inventions because they potentially risk forfeiting significant financial rewards from exploiting their ideas. Governments and the public also feel that in the absence of incentives, inventors might choose to not invent or keep their ideas secret in order to protect their efforts. However, there are practical problems in maintaining trade secrets, which are prone to unintentional public disclosure, thus destroying the inventor’s priority claims to the invention. Once an invention has been released, reverse engineering can be employed to reveal the invention’s process and inner workings. Thus, once

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Cross-Cultural Perspectives on Knowledge Management released as a product or service, the opportunity to maintain secrecy is lost for many inventions. In these instances, the patent system provides a mechanism for protecting the inventor’s interests while purportedly addressing broader societal needs for promoting innovation. Today, a patent represents a contract between the inventor and society whereby the inventor is granted a limited monopoly for their invention for a period of time and in return agrees to publicly disclose the details of the invention so that others might improve upon it and use this knowledge to create new inventions. In this way, the patent record provides a repository of innovative knowledge from which society can draw to address current challenges and to evaluate and generate new inventions. Western societies rely heavily on continued innovation to fuel commercial ventures and to promote economic growth. Westerners view invention not as a gift from the gods, as did the ancient Greeks, but as a human activity that is amenable to individual, organizational, and societal management (Cooper 1991). Individual inventors play a critical role in meeting societal level demands for new products and services, and governments of Western nations believe continued growth and prosperity depends upon the regular supply of innovation from their citizens. Supporting and promoting inventive activity is seen as crucial to the continued success of the nation and thus within the purview of government management. The motivation for patenting is culturally embedded in Western attitudes toward creative activity in general, and technical activity in particular (Cooper 1991). The patenting system provides an institutional inducement for invention by attempting to align the individual needs of the inventor with the broader needs of society. Patenting is not the only approach taken by nations to meet this alignment. For example, before 1791, France did not have a patent system, relying instead on a set of institutions for state identification, reward, and utilization of inventions through privileges (MacLeod 1991). Although the purpose of these privileges paralleled the Anglo-American patent systems, the French system employed the economic resources of the government and not of private individuals through limited monopolies. The French government dealt with invention as an integral part of its economic policy and extended this to encourage manufacturing (MacLeod 1991). This was in sharp contrast to other jurisdictions like the United States and England, which took a decidedly hands-off approach, leaving these decisions to the open market to decide. Having extensive government involvement in the affairs of inventors is culturally untenable in societies that value entrepreneurship and an open market. As the use of patents grew in prominence, the power of the monopolies they created came under increasing scrutiny. Governments came under pressure to limit the excesses of monopoly while encouraging the introduction of new manufacturers and promoting invention (MacLeod 1991). Part of the motivation for encouraging manufacturing was so that others, including the patentee’s employees, could learn the methods. This was often incorporated directly into the conditions of the patent grant. For example, English and some American patents regularly in the sixteenth century—and occasionally in the seventeenth century—included a requirement to instruct a certain number of apprentices; however, by the eighteenth century, this practice disappeared (MacLeod 1991). MacLeod (1991) points out that the role of patents in economic development is to stimulate invention by ironically inhibiting its free diffusion by imitators. Inherent in patenting practice is a paradox that in order to stimulate invention governments must

Managing Innovative Knowledge inhibit diffusion. Since the seventeenth century, the usual English and American way of rewarding invention has been indirectly through the provision of monopolistic power over the idea (Cooper 1991). In this way, the patentee defines and publicizes the original idea about the invention, and turns this into private property over which the owner has legal rights to use or license for a limited duration (Cooper 1991). It is not always clear whether granting patent protection serves broader societal assumptions of promoting innovation and encouraging new products and services without providing excessive monopolistic benefits for the inventors and impeding further innovative activity within an industry. The issue of software patents introduced in the previous section was exacerbated in the context of Internet patents during the dotcom boom era. Companies eager to claim control over key business processes relating to trade and commerce on the Internet have filed numerous patent applications for software and business method patents that apply to online networks. Many claim that these patents deal with innovations that are obvious techniques or processes that have simply been computerized. These challenges have been exacerbated by the lack of trained patent examiners, resulting in the issuance of poor-quality patents and further fueling the debate. Those patents that were issued sometimes had the unintended consequence of providing protection for large tracts of e-commerce related activity, making it difficult to navigate the intellectual property rights owned, or more likely pending, related to Internet-based inventions. This produced considerable uncertainty in the market and likely impeded innovation for many companies wishing to pursue e-commerce related activity or seek patent protection. Internet patents, as a form of software and business process patent, are not recognized in all jurisdictions. The United States led the push for patent protection of these types of innovations while other countries were slower to recognize the claims. Today most countries, fueled by international treaty and trade agreements, recognize software-related patents to some degree. The United States and Japan tend to embrace these patents and are key influencers of international trade agreements, whereas countries like Canada, China, and the European Union nations tend to take a more moderate approach to granting software patents. The motivation for patenting is built upon a foundation of promoting innovation and inventiveness within particular jurisdictions, but in order to do this, the diffusion of the innovation must be controlled. Culture influences the degree to which a country is willing to impede the diffusion of particular innovations. Countries like the United States with strong individualistic and entrepreneurial cultures are willing to extend the rights to those inventors at the frontier of computer-implemented inventions while other countries are more cautious in their approach. Interestingly, if countries like the United States and Japan are successful in securing patent protection for key aspects of e-commerce then countries taking a more moderate approach to software patents might inadvertently place their inventors at a disadvantage if these patents are eventually granted domestically—which is likely, given current trends toward treaty and trade agreements. In the next section, cultural impacts on the shift in the ownership of innovative knowledge are explored.

INTELLECTUAL PROPERTY OWNERS Cultural norms concerning the rightful owners of intellectual property influence the practice of patenting. Communal perspectives emphasize group ownership, whereas

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Cross-Cultural Perspectives on Knowledge Management other worldviews place primacy on individual genius and the importance of individual entrepreneurship. As a result, the dominant intellectual property owners have shifted over time with origins in communal guilds, to the rise of an individual focus, to a partial return to communal ownership in the modern corporation. As mentioned previously, the concept of ownership of innovative knowledge originated within the medieval guilds. The guild commune essentially owned the intangible craft knowledge. Membership in the guild and adherence to its regulations was rewarded through access to the guild knowledge for the economic benefit of its members. By participating in the management of the guild, individuals were able to effect the management of the intellectual property and the practice of the craft through various rules and sanctions imposed upon its members. The case of the Venetian glassmaker guild illustrates the nature of the guild corporation: Only a few regulations governing the guild dealt with the technical processes of glassmaking (e.g., the type of wood to be used in the furnaces and the number of holes allowed in the main furnace). Instead, the focus was on policies related to the number of working days, election processes, apprenticeship practices, the handling of stolen goods, and the selling of defective glass (Long 1991). The corporation restricted the export of the craft by forbidding its practice outside of Venice while facilitating the export and sale of glass products across Europe. This effectively restricted the practice of glassmaking to the city, thus allowing the guild to control the quality of the product and ensure that Venetian glass was only available from Venice. However, maintaining that level of control over craft practitioners proved difficult, as many wished to produce Venetian glass outside of Venice because there was considerable economic benefit in doing so. During the late fifteenth century and the sixteenth century the role of individual ingenuity and authorship emerged to supplant the importance of communal ownership. This revised view of the individual in invention contributed to a heightened concern for the “priority dispute” policy, especially in instances where several individuals claimed to have invented a particular innovation. In 1790–91, as a result of various political revolutions, both France and the United States established patent systems that embodied the concepts of an inventor’s natural right to their intellectual property. French patents were placed under considerable scrutiny, but there was commensurable reward available from the state if the invention was deemed to merit support. In contrast, the English patentee paid for the right to exercise a 14-year monopoly over production and sale of their invention, and by the eighteenth century, after many years of abuse, the English government’s main concern was to avoid embarrassment arising from the suggestion of monopolies (MacLeod 1991). During the medieval era, local invention and the importation of new techniques from other locations was rewarded. No distinction was made between local or foreign innovations and there was no assessment or consideration for claims of ownership of the innovation. The focus was on promoting innovation within a particular city, and novelty was assessed in terms of its newness to the city and not to the world. However, this focus of ownership gradually shifted away from cities to nation-states. Patenting rights were no longer conferred to individuals residing within a particular city but instead were granted to individuals within a particular nation, although considerable differences in practice existed between jurisdictions. For example, early U.S. patents were restricted to citizens and aliens resident for at least two years, whereas English patent

Managing Innovative Knowledge holders were not required to reside in England or commercialize their invention in the country (MacLeod 1991). While the jurisdiction expanded from guild, to city, to nation, ownership still resided almost exclusively with individuals, whether they were citizens or not. As late as 1921, 72 percent of patents in the United States were awarded to individuals while by 1938, the majority went to corporations because of the growing importance of industrial research and the advantage corporations had in navigating the patenting process (Owens 1991). Since the late nineteenth century, incorporation laws have allowed corporations to become increasingly important owners of innovative knowledge (Carruthers and Ariovich 2004). In China, where there is little corporate privatization, changes in property rights have contributed to the creation of new ownership forms, including reformed state firms, government–management partnerships, leased public assets, and private companies (Oi and Walder 1999). The ownership of innovative knowledge originally concentrated within the communal structures of the guilds and gradually shifted to individuals in recognition of the role of individual authorship and creativity. Increasingly, this individual creativity is being leveraged through research groups within corporations resulting in a shift in ownership to corporations. These companies are now the owners of a large majority of the innovative knowledge, often controlling entire domains of knowledge through the use of interrelated patents. It is perhaps ironic that the entrepreneurial and individualistic cultures that promoted patenting produced a system dominated by collective cultures at the organizational level. This shifting profile of the owners of innovative knowledge to large multinational corporations provides interesting challenges for managing and enforcing patent rights across cultures.

ENFORCEMENT OF RIGHTS How patents are managed and rights are enforced are also influenced by cultural views on the role of entrepreneurial activity and the implicit contract between the inventor and society. For an invention to be patented and enforceable it must be new, nonobvious, useful, and directed toward patentable subject matter. To evaluate newness, previous patents and other documents in the public domain (i.e., the prior art) are used to evaluate the novel contribution of the invention. If several pieces of prior art can be used to create the proposed invention, then the invention is considered to be “anticipated” and not patentable. The nonobviousness of the invention is from the perspective of someone experienced in the art. Today, if the other criteria for patentability are met, then the issue of usefulness is left to the open market to decide. Given the effort and expense of patenting, it is assumed to be unlikely that an inventor would file a patent application for an invention that they could not envision a reasonable use from which to extract economic value. However this value is not always apparent at the inventive stage, and many of the rules surrounding patenting are designed to provide adequate time for the inventor to assess such potential. In Canada, for example, examination of the invention is not automatic, and the inventor is allowed a period of time after filing before requesting a full examination of the application. This facilitates time to raise investment, complete further research and development, or pursue other activities related to assessing the market potential of the invention. Many of the regulations guiding patenting are

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Cross-Cultural Perspectives on Knowledge Management aimed at benefiting individual inventors with limited resources; however, as explored in the previous section, ownership of much of the patent knowledgebase is with corporations that have significant resources to direct toward patenting activity. Despite the growing importance of corporations for patent ownership and enforcement of rights, within entrepreneurial cultures there is a tendency to romanticize about the individual inventor and their plight alone on some new frontier, when it is more likely that entrepreneurial activity will occur within a corporate setting as part of a well-funded research and development team. The patent offices in each country are charged with the task of processing patent applications. The patent office decides whether an innovation becomes property or not. If a patent is issued, then the idea becomes property, at least until such time as the patent is challenged and deemed invalid. The involvement of the patent office in this process has changed over time. As noted earlier, at one point the British state did not use the resources of the government to promote inventions and instead registered the patents and then withdrew (MacLeod 1991). In sharp contrast, French patent applications received considerable scrutiny, owing to the considerable value placed upon inventions and their inventors and the rewards available from government. By the early nineteenth century, both British and North American practitioners and researchers regarded patents as a contract between the public and the inventor, who was awarded a temporary monopoly in return for disclosure of the invention (MacLeod 1991). The specification of the patent describes the invention, its usefulness, and the boundaries of the patent protection claimed. It was critical, therefore, to have specifications that were clear, complete, accurate, and with sufficient detail to allow someone skilled in the relevant trade to imitate the methods. The importance of the specification emerged over time. Under the early English system, the specification was not scrutinized unless and until the patent came before the courts. In this form, it was originally not intended as a means of informing the public but instead as a measure to assist the courts in deciding the merits of a disputed patent (MacLeod 1991). It was only in the final quarter of the eighteenth century that the specification under the English system became the focal point of the patent along with an expectation that the specification should inform the public, albeit a domestic public (MacLeod 1991). The English system until 1905 and the American system from 1793 to 1836 did not require prior examination of an inventor’s claims to originality, as this was left for patent litigation to decide should such a challenge arise (Cooper 1991). This consumed considerable time in the courts, and there was an eventual shift toward patent inspection for originality. This eased the burden on the courts but increased the demands of those evaluating patent applications at the patent offices. As noted in the previous section, a key issue in establishing a patent is assigning rights to the owner. However, who owns a particular invention is not always clear and varies by the approach taken in assessing ownership. Two main strategies are currently discernable. Under the first-to-invent principle used in the United States, the patent is granted to the inventor with the earliest date of invention. In contrast, under the first-to-file principle recently adopted by Canada and in use in most countries, a patent is granted to the inventor with the earliest filing date. The adoption of the first-to-file principle moved Canadian patent practice away from the United States and more in line with European approaches. The first-to-invent principle is deeply rooted in American

Managing Innovative Knowledge individualism and an antagonism toward powerful central government. It reflects the notion that it is private enterprise and not the state that provides inventive ideas for the economy (Owens 1991). First-to-invent places emphasis on the primacy of individual creative acts, whereas the first-to-file focuses more on meeting the demands of a collective bureaucracy to determine ownership. This emphasis on the role of individual inventors was guaranteed within the United States with a constitutional grant of power to Congress “to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries” (Coe 1969, 863). Software patents provide particularly fertile ground for challenges to patent rights. As noted previously, each country tends to adopt particular nuances and degrees of enforcement with respect to software patents, even when such innovations are covered under various treaties and trade agreements. Of particular importance is the manner in which software is claimed as part of a patent application. For example, in the United States, a claim can be made for a computer program stored on computer readable media; thus, a patent holder can enforce the patent against publishers placing the software on the media without having to go after individual end users. This type of program product claim (aka a Beauregard claim) is not recognized in all jurisdictions, although it is increasingly being adopted. To compound the problem of enforcing patent rights, patent litigation is expensive. This is clearly prohibitive for individual inventors with limited financial resources but is also of concern to large corporations that potentially face extremely large patent settlements if they are found to be infringing. An interesting development in this regard is the establishment of cross-licensing agreements among large software companies in which each agrees not to sue the other over patent infringements. In fact much of the activity related to filing of patents is to maintain a pool of patents to be “traded” within these reciprocal agreements. However, even companies without large patent portfolios have been able to secure reciprocal rights with large software companies in the face of expensive and uncertain litigation. The same cultural assumptions that motivated a reliance on agreements over relationships is now being used to voluntarily limit the rights of patentees for the greater good of specific industries. The differences and similarities outlined thus far illustrate various cultural approaches to patenting that are presented as being somewhat isolated but in practice are increasingly interrelated with the actions of one jurisdiction influencing the others. Over time, these ongoing negotiations fueled by treaties and trade agreements that tend to standardize practice give rise to a global patent system. The impacts such a system has on the constituent cultures that inform it are discussed in the next section.

GLOBAL PATENT SYSTEM Although intellectual property values emerged from the confines of the guild context, the ideals of patenting spread from individuals breaking away from the guilds (Long 1991). This led, for example, to Italian inventors promoting the concept of patents in other cities beyond Venice and in other countries beyond Italy (Long 1991). From Italy, concepts of patenting quickly spread to France, England, and beyond. The practices of the established patent strongholds have continued to influence other countries in

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Cross-Cultural Perspectives on Knowledge Management their patenting practice. The Canadian patent practice is predominantly influenced by developments in Britain and the United States. The Canadian Patent Act was modeled on the U.S. legislation, whereas key areas were derived from British practice (Duy 2001). More recently, changes to the patent act in Canada have been influenced by European practice, including early publication, deferred examination of patent applications, and the introduction of maintenance fees; in contrast, Japan looked to German and French intellectual property law at the end of the nineteenth century to inspire their systems (Carruthers and Ariovich 2004). However, as each country adapted the patenting system to promote their local interests, it became increasingly onerous for inventors to navigate between systems. As the inventors and inventions were decoupled from their jurisdictional constraints, the seeking of patent protection in multiple jurisdictions became attractive. Various treaties and trade agreements facilitated the cross-cultural management and enforcement of patent rights. The 1883, the Paris Convention for the Protection of Industrial Property provisioned the recognition of foreign patent filing dates and an obligation for member states to provide the same protection for foreigners as for their residents. A Secretariat originally formed to administer the Paris Convention was absorbed with the creation in 1970 of the World Intellectual Property Organization (WIPO). The internationalization of the patenting process was continued by the Patent Cooperation Treaty (PCT), which facilitates obtaining patent protection in more than 100 member countries. Various trade agreements are also implicated in this process. For example, the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) Agreement on Trade-Related Aspects Intellectual Property Rights (TRIPS) obligated members to make available patents for all fields of technology and to refrain from restricting patent rights based upon place of invention or whether a patented invention was imported or manufactured locally. Today most of the world’s intellectual property is owned by Europe, the United States, and Japan, leaving many other countries as net consumers of intellectual property (Carruthers and Ariovich 2004). For example, Canada is a net importer of innovations, with foreigners owning 90 percent of Canadian patents, with roughly half of those owned by United States patentees (Duy 2001). This patent profile is in sharp contrast to countries like the United States, where the majority of the patents are owned domestically. The growing international nature of the patent system, fueled by treaties and international trade agreements, has necessitated the standardization of policies related to patents. However, there is still variation in practice as to how those policies are implemented. The approaches to software patents serve to illustrate the point. The United States and Canada have very similar policies with respect to the wording of claims related to software patents. Software for an algorithm or mathematical formula is not patentable; however, if an invention embeds the software in hardware or the software is described in terms of an apparatus or system, then it is patentable because a programmed computer is considered a machine. However, in the United States, software is patentable as long as it produces a useful, concrete, or tangible result and does not merely monopolize the underlying algorithm. In Europe, although software is explicitly excluded from patentability, a product or method that is of a technical character may be patentable, even if the claimed subject matter defines or at least involves a

Managing Innovative Knowledge business method, a computer program, or the like (Van Barr 2001). Two instances in which software can have a technical character are when it manages, via a computer, an industrial process or the working of a machine and if it produces further effects in the hardware (Van Barr 2001). Although there has been ongoing and often heated debate over the patentability of software in various jurisdictions, as one jurisdiction opens a new area of patentable subject matter, it is nearly impossible to retract those rights and extremely difficult for other jurisdictions to refuse to accept those innovations as patentable subject matter. To do so is likely to be against the terms of the various treaties and trade agreements that most countries now belong to and potentially disadvantages local inventors, who must now compete with competitors afforded protection to which they do not have access locally. In this way, the globalizing of national rules and standards allows interest groups to use local political power to influence global rules (Carruther and Ariovich 2004). Patents and patenting systems do not exist in isolation, and pressure is already coming from industries and governments to limit licensing fees and to pressure the owners of new technologies: If they wish their technologies to become industry standards, then they must reduce the restrictions on use that would otherwise be available under patent protection. The software industry has long favored open standards as contributing more to innovation than patenting. The software industry players point to the growth and success of the Internet without patents, and contrast that with the litigation and challenges faced by today’s firms through the enforcement of patents. China, African countries, and those in South America take an objectivist-utilitarian approach, claiming that intellectual property is inherently social in nature and the state has the right to limit the individual claims of its citizens in the name of the public good. Interestingly this is the same argument used by nineteenth-century United States to refuse patent claims by non-nationals (Hesse 2002). The United States and other Western countries with a vested interest in protecting the domestically produced intellectual property and ensuring continued access to foreign innovations have shifted toward a doctrine of universal rights of authors and inventors for the exclusive commercial exploitation of their creations and inventions (Hesse 2002). Interestingly, recent research points out that strong patent-law systems do not necessarily increase the number of innovations, but they do affect the kinds of innovations a country produces (Moser 2005). Not surprisingly, inventors tend to create the types of inventions they can protect. If patent protection is not available, then they create inventions that can be protected by trade secret. For software patents, a similar strategy has been implemented at the industry level with inventors—in the form of large software companies—recognizing that the patent system is not meeting their needs due to the uncertain and high cost of litigation. Thus they have essentially returned to the guild culture from which patents originated relying instead on agreements based upon communal rights to collective repositories of intellectual property.

CONCLUSION In the course of managing patents, people and ideas interact in defining the benefits and costs of intellectual property, in defining invention, and in determining the originality and newness of human-made objects, whether tangible or intangible (Cooper 1991).

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Cross-Cultural Perspectives on Knowledge Management Patenting exists at the intersection of cultural systems such as legal, economic, political, and academic systems, and is increasingly affected by globalization and changes in information technology. The cultural systems of patenting have continuously created and shaped the inventor’s rights and rewards for creating intellectual property. Our distinction among invented objects reflects what a culture values, highlighting the importance of private property rights and technological innovation. Our relation to technology, its history, and how people have made technological distinctions is reflected within the patenting systems of various societies that inform it. The reciprocal connection between organizational culture and the society in which individuals and businesses are embedded is evidence that the patenting system reflects societal norms while both informing and being informed by the stakeholders of these and other systems. The global nature of patenting has contributed to both the blocking and the free flow of knowledge across cultural boundaries. Given its origins, approaches to patenting have moved well beyond the original localized vision of the patent system, though some have returned to those beginnings for the management and protection of particular innovations. To consider patenting as monolithic and unchanging is to ignore the rich history of the ongoing negotiations and cultural expectations acted on through social, political, and economic systems. As nation-states become more dependent on international trade and commerce, local concerns give way to more global perspectives on knowledge sharing and the protection of intellectual property. The very technologies that the patent system is designed to encourage also facilitate changing the nature of the system and challenging the cultural assumptions upon which it is based. Although the patent system remains globally focused, its constituent cultures inform and adapt how the system is employed in practice. These diverse cultures produce different societal and organizational practices in managing innovative knowledge, and therefore, a one-size-fits-all approach to the management of innovative knowledge is inappropriate. Still, the patenting system appears dominated by Western views, and the price of admission to this system is to adopt these or similar practices despite different assumptions about the purpose of the patenting, how knowledge should be shared and protected, and the ability to pay for what has become a very expensive and exclusive system to join and maintain. For countries that are ill equipped financially to adopt or adapt this system, the costs of accessing and building on global innovations further curtails their ability to participate and contribute. The dual role of patents in both enabling and constraining innovation must be balanced. On the one hand, we risk unjustifiable and potentially worldwide monopolies over aspects of entire industries; on the other hand, demanding excessive disclosure potentially inadequately rewards those individuals and groups responsible for the creative leap.

REFERENCES Alford, W. P. 1995. To steal a book is an elegant offence: Intellectual property law in Chinese civilization. Stanford, CA: Stanford University Press. Carruthers, B. G., and L. Ariovich 2004. The sociology of property rights. Annual Review of Sociology 30:23–46.

Managing Innovative Knowledge Coe, C. 1969. Hearings before the Temporary National Economic Committee. New York: Arno Press. Cooper, C. C. 1991. Making inventions patent. Technology and Culture 32 (4): 837–45. Duy, V. 2001. Brief history of the Canadian patent system: The Canadian Biotechnology Advisory Committee Project Steering Committee on Intellectual Property and the Patenting of Higher Life Forms. Strategis Canada, http://strategis.ic.gc.ca/epic/internet/incbac-cccb. nsf/en/ah00405e.html. Hesse, C. 2002. The rise of intellectual property, 700 bc–ad 2000: An idea in the balance. Daedalus 131:26–45. Long, P. O. 1991. Invention, authorship, ‘intellectual property,’ and the origin of patents: Notes toward a conceptual history. Technology and Culture 32 (4): 846–84. MacLeod, C. 1991. The paradoxes of patenting: Invention and its diffusion in 18th and 19th century Britain, France, and North America. Technology and Culture 32 (4): 885–910. Moser, P. 2005. How do patent laws influence innovation? Evidence from 19th century World’s Fairs. American Economic Review 95 (4): 1215–36. Oi, J. C. and A. G. Walder. 1999. Property rights and economic reform in China. Stanford, CA: Stanford University Press. Owens, L. 1991. Patents, the “frontiers” of American invention, and the Monopoly Committee of 1939: Anatomy of a discourse. Technology and Culture 32 (4): 1076–93. Van Barr, C. C. 2001. Patentability of software and business methods. Gowling Lafleur Henderson, LLP. http://www.gowlings.com/resources/publications.asp?showWhat = 697.

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7 The Influence of National Culture on Knowledge Management in Virtual Teams Doug Vogel, Anne-Francoise Rutkowski, and Michiel van Genuchten

ABSTRACT Knowledge management (KM) has emerged as a critical factor in both organizational and academic settings in distributed contexts that increasingly engage multiple national cultures. This chapter explores aspects of national culture with respect to characteristics of KM in virtual teams supported with both synchronous and asynchronous technologies. The HKNET project, involving participants from three continents and extending over seven years, is used as a foundation and point of departure. Findings are presented to provide credibility and ease understanding of relevant issues with special attention given to cultural convergence. Discussion extends to application of findings in virtual teams within commercial organizations as an illustration of generalizability and corporate impact. Implications for practice are drawn. The chapter concludes with a model of the interaction dynamics associated with national culture, technology choice, and knowledge management process and outcomes.

INTRODUCTION Knowledge management (KM) has emerged as a critical factor in both organizational and academic settings in distributed contexts. KM in virtual teams (VTs) presents a number of challenges, among which are aspects of national culture (Qureshi and Vogel 2001). National culture, as well as organizational and professional culture, is an important characteristic of VTs that interact with group dynamics in a number of ways with a plethora of implications (Griffith, Sawyer, and Neale 2003; Vogel et al. 2001b). However, issues need not be addressed simultaneously and, in fact, some appear only after others have been recognized and managed (Rutkowski et al. 2002b).

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Cross-Cultural Perspectives on Knowledge Management The HKNET project has provided a fertile ground within which to explore aspects of KM in VTs supported with both synchronous and asynchronous technologies with an emphasis on national culture implications (Vogel, Davison, and Shroff 2001a). In particular, participants organized into teams of six to eight people from five distinct national cultures (Hong Kong, the Netherlands, France, the United States, and Mainland China) have collaborated in virtual teams resulting in deliverables such as electronic books. KM issues influenced by national culture arise throughout the projects that typically extend over a six-week period as teams identify research issues around a broad topic (e.g., telemedicine), develop consensus, coordinate activities, and integrate research results. KM phases include creation, storage/retrieval, transfer, and application (Alavi and Leidner 2001). The HKNET project has now run for seven years and much has been learned. The purpose of this chapter is to explore aspects of national culture with respect to characteristics of KM in VTs. The seven-year HKNET project is used as a foundation and point of departure. Findings are presented to provide credibility and ease understanding of relevant issues. Discussion extends to application of findings in virtual teams within Philips Software as an illustration of generalizability and corporate impact. The chapter concludes with a model of the interaction dynamics associated with national culture, technology choice, and knowledge management process and outcomes.

BACKGROUND This section provides a foundation based on national culture and characteristics of the HKNET project to establish a basis for findings and subsequent discussion. KM is used as a theme to focus and organize issues.

National Culture Culture plays an especially salient role in virtual teams. A culture is a system of knowledge, a set of learned behaviors and beliefs, and a way of categorizing experience shared by a particular society, population, or group (Triandis 1994). A popular way to look at culture involves the examination of national traits. From this perspective, culture is seen as a relatively stable and long-lasting attribute of our behavior. Numerous cross-cultural researchers (Gudykunst and Kim 1988) have used cultural dimensions developed by Hofstede (1980) to distinguish members of one cultural group from another. Although Hofstede’s cultural model has often been criticized for containing sampling flaws, the general cultural constructs have been shown to be useful for explaining potential differences in culture with regard to the use of information technology (IT) (e.g., Mejias et al. 1997). The Chinese concepts of Guanxi and interpersonal interdependence are representative of norms of hierarchy. Guanxi is defined as a network of personal relationships or of interpersonal connections based on the principles of reciprocity and regulating social interactions (Bond and Hwang 1986). A person’s Guanxi drives their personal attitude and behavior. The collectivist aspects of Confucian societies promote efficiency and harmony as synonyms of one’s Guanxi or interpersonal connections (Hwang 1987). In Confucian societies, “harmony within hierarchy” characterizes many social interactions, whereas Western theories perceive hierarchy as a level of interpersonal

The Influence of National Culture on Knowledge Management in Virtual Teams interdependence between members of a social network (Rijsman 1997). The perceived value of interdependence in Western culture depends, on the one hand, on positive interpersonal interactions among team members and a sense of compatibility (McGrath 1984); on the other hand, it depends on the structural feature of the relationships between team members (e.g., leader versus follower) (van der Vegt, Ermans, and van de Vliert 1999), and stems from the task within the team (e.g., task interdependence). The normative and cultural need for hierarchy in Confucian and Western thinking is observable through differing conceptualizations of the notion of leadership. In Western culture, a democratic style of leadership is generally advocated, converting the ability to balance freedom and authority into the concept of charisma or as a personal ability. In Western culture, one’s personal ability is an explicative factor to the style of leadership. Research on leadership demonstrates that balance between task-centered activities and consideration for others is important for effective leadership (Fiedler 1965). The Confucian culture focuses on the guardian role of the leader, with the expectation to take control and to be in possession of the solutions to maintain harmonious dynamics in the group and tends to be authoritarian and paternalistic (Bond and Hwang 1986). We also recognize a dynamic view of culture. In this sense, the person that belongs to a particular national group is seen as the guardian of culturally based assets as mutually defined in a context (Gergen et al. 1996). This emerging perspective views culture as being more dynamic, process-based and constructivist by nature as a function of the context. In other words, culture can be seen as contested, temporal, and emergent (Myers and Tan 2002, 29). For example, Hong and colleagues (2000) note that under conditions of heavy time pressure, experimental subjects tended to behave in a manner consistent with trait-based cultural norms (cf. Hofstede 1983). However, if time pressure was absent, experimental subjects exhibited greater cultural variance and willingness to change normalized behaviors. Similar effects occur when cognitive load is heavy or light (cf. Briley, Morris, and Simonson 2000). These surface differentiations between national cultural perspectives do not necessarily contradict each other if we consider the situation at another level. National culture can be influenced by conditions (e.g., time pressure) and mixed with elements of other cultural conditioning (e.g., professional and organizational). This does not diminish the importance of national culture but only serves to recognize the inherent complexity in seeking to draw robust conclusions. The reality is that national culture is a foundation upon which many of the other dynamics exist. At the end of the day, the foundation remains as has been witnessed in the seven years of HKNET.

HKNET Project Over the period of seven years, more than 800 students have participated in the HKNET project as an example of KM in action. The number of students has grown from 65 in the first year to 163 in the seventh year. About half of the students in this project are studying part-time while also working, and the other half are full-time university students. The project started with universities in Eindhoven (The Netherlands) and Hong Kong. The number of universities involved over the years has expanded to include universities in Tilburg (The Netherlands), Grenoble (France), and Orlando (United States). This past year students from Beijing participated for the first time.

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Cross-Cultural Perspectives on Knowledge Management Typically, HKNET teams consist of 8–10 students from two to four cultures. The team assignment encompasses an IT–related topic (e.g., offshore outsourcing, extreme programming, or mobile devices) from different cultural and geographical perspectives in a structured process consisting of multiple divergent and convergent activities over a six-week time frame. The teams define a number of research questions to focus their study of the subject. Three research questions are selected to reflect important and/or emerging information science trends and collection of material follows. Vogel and colleagues (2001b), Rutkowski and colleagues (2002a, 2002b), as well as Genuchten and colleagues (2005) provide additional process detail and explore a range of issues with special focus on multicultural virtual team dynamics. The following list illustrates the sequence of six activities undertaken by the teams. 1. Introduction: The project started with the formation of the local national teams. The local teams selected a subject from a given list and formed a team with their global counterparts that selected the same subject. A videoconference was held in order to “meet” the global members of the team. The videoconference lasted 10 minutes per team, after which the teams used the learning management system to continue the discussion. 2. Deciding upon research questions: The team members were asked to identify possible research questions for their project and converge on the research questions to be selected for their project. Some groups arrived at a consensus during the introductory videoconference. Others used chat, virtual whiteboard, and discussion forums to generate and prioritize research questions. 3. Division of responsibilities: After the framework was established, each team member selected a portion of the Web site for which to provide content. 4. Plain text and comment on contributions: This activity enabled the team to simultaneously create different sections of the Web site. This activity was typically performed using a text processor and the results were submitted to the person(s) in the team assigned as Web master(s) for the team. 5. Webmaster prepares Web site: The editor transformed the text file into a draft version of the Web site and typically completed it within a week. 6. Reviewing of the Web site by members of the team: The draft Web site was evaluated and the team arrived at a final Web site after one or two iterations.

The synchronous and asynchronous technologies used have included videoconferencing, e-mail, group support systems (GSS), and an off-the-shelf learning management system (Blackboard) that support both chat and forums under the control of the students within structure provided by the instructors. Videoconferencing is used at the start of the project, halfway through the six weeks to track the progress, and once again toward the end to celebrate the completion. Table 7.1 illustrates the nature of the activities as a function of synchronous and asynchronous technologies use. Aspects of both technology and process are considered as has been deemed important in other KM related studies (e.g., Kwok, Ma, and Vogel 2002). Initially, the team effort resulted in ten-page reports in 1998, 1999, and 2000 and in recent years Web sites have been developed. From 2002 to 2004 (and since) the results have been formed into electronic books on the software industry, available at www. bohknet.com. These constituted a variety of KM efforts and activities covering phases of creation, storage/retrieval, transfer, and application (Alavi and Leidner 2001).

The Influence of National Culture on Knowledge Management in Virtual Teams Table 7.1 Synchronous versus asynchronous communication activities Synchronous

Asynchronous

Introductory videoconference: A 10-minute per group videoconference enabled group members to form some initial perceptions of their team members.Teams additionally began to discuss the domain of their topic.

Discussion Forum: (Social Oriented) A forum was used during the team member introduction for members to tell something about themselves and learn more about the team members. A separate forum was also used for planning, among others to let team members know when members planned to work on the project.

Chat Sessions:Six synchronous chat sessions were planned in order to provide the opportunity to the participants to exchange information synchronously. The participants were free to organize more chat sessions during the project.

Discussion Forum: (Task Oriented) A forum was also used to discuss issues regarding the management of the project. Issues like the progress, planning, approach, and division of work were discussed. In another forum, the potential research questions were generated and discussed. Discussion Forum: (Convergent) A forum was used to converge upon the research questions that the team would work on for the next six weeks. Report Outline: This forum was used to begin to formulate the report.

Midterm videoconference: A 20-minute videoconference was used by each of the teams during Week 3 to coordinate activities and/ or solve potential conflicts.

E-mail: The participants could use this facility to send e-mails to their whole team, to some selected participants, or to the instructors. File exchange: Students typically posted draft versions of the content of the Web page and thus could review and improve each other’s work.

Final videoconference: The projects concluded with a final videoconference in which the results and implications of the project were presented and awards presented to highperforming teams.

HKNET EVOLUTION Much has occurred over the past seven years with respect to KM aspects of national culture in VTs as the HKNET project has evolved. Each year has led to changes that have enhanced KM effectiveness and efficiency.

HKNET1 The first trial commenced in October 1998 linking teams consisting of part time MBA accountancy students from the City University of Hong Kong and full time business

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Cross-Cultural Perspectives on Knowledge Management engineering students from Eindhoven University of Technology in the Netherlands in a structured seven-week project. In total, 72 students participated, dividing into 10 teams with varying degrees of experience in working in distributed cross-cultural contexts. Dutch experiences ranged from international traineeships and exchange programs to having a foreign friend (“my girlfriend is from Bulgaria, does this count too?”). The Hong Kong experiences typically included working as middle-level managers in multinational companies. Before the start of the project, the students attended lectures covering several subjects related to the team assignments. Because of the different backgrounds of the students, the lectures in both locations were not identical: Whereas the Dutch lectures were given from a software-engineering point of view, the Hong Kong lectures focused on aspects of the impact and implications of information systems from a management perspective.

HKNET2 A second trial between the same institutions was launched in November 1999 that built upon knowledge gained from the first year. The second trial consisted of 57 students divided into nine teams with balanced Hong Kong–Netherlands membership. In the second trial, part-time MBA management students from Hong Kong and full-time business engineering students from Eindhoven and full-time MIS students from Tilburg University (a university located 30 kilometers from Eindhoven) engaged in a structured six-week project. As such, elements of professional as well as national culture were present. In this case the Hong Kong students were especially experienced in working in multicultural teams and the majority had significant remote collaboration experience. Feedback from HKNET1 was used to further modify technology, processes and materials. In particular, the need to better orient the students and familiarize them more with the material and each other had became especially apparent in the first trial. Similarly to HKNET1, students attended lectures covering several subjects related to the team assignments prior to the project. However, efforts were extended in HKNET2 to make the material more available immediately preceding project commencement (e.g., a Hong Kong session focused specifically on software engineering). Class Web sites gave students at both sites access to materials. These cross-cultural teams also had the opportunity to introduce themselves at the start of the project, for which a high bandwidth videoconference link between the two universities was established. After the introduction, all participants gained access to GroupSystems via the Internet, the main collaborative tool for students to work on their project in a structured way. They could also use e-mail and desktop videoconferencing via NetMeeting to communicate with their teammates as the project progressed.

HKNET3 HKNET3 commenced in October 2000 with 61 students divided into 10 teams, with balanced Hong Kong–Netherlands membership. In HKNET3, part-time Masters of Science in Electronic Commerce (MScEC) students from Hong Kong and full-time business engineering students from Eindhoven and full-time MIS students from Tilburg University engaged in a structured six-week project. The MScEC students, unlike those in previous years, had a predominantly computer science background and thus were

The Influence of National Culture on Knowledge Management in Virtual Teams in some ways more homogeneous with their Dutch colleagues. However, they did have a high degree of international working experience in alignment with the Hong Kong students in HKNET1 and HKNET2. We therefore expected less disciplinary culture difference but a continued significance in national and organizational culture differences. Feedback from HKNET2 was used to further modify technology, processes, and materials. In addition to preserving HKNET1 learning, more time was dedicated to topic preplanning to better fit student interests. Furthermore, in HKNET3 added attention was given to cultural orientation for the students as well as better familiarizing them with the material. As such, a session conducted by a cross-cultural facilitator (Gert-Jan Hofstede) via videoconference exposed the students to issues in cross-cultural collaboration (Dustdar and Hofstede 1999). In HKNET3, attention was shifted toward cross-cultural dynamics and better understanding of determinants of successful interaction. Toward that end, special attention was given to antecedents that might enable prediction of successful interaction and/or particular areas to focus attention upon in facilitating cross-cultural interaction.

HKNET4 HKNET4 introduced additional national cultural elements. The 104 participants were graduate students from four universities. They were part-time MScEC students from Hong Kong, full-time industrial engineering students from Eindhoven (The Netherlands), full-time MIS students from Tilburg University (The Netherlands), and full-time MBA students from l’École Supérieure d’Administration de Grenoble (France). The 104 participants were spread across 13 teams, eight of them tricultural (n = 66) and the remaining five bicultural (n = 38). Local team members in each country were selfselected and chose a topic from a prescribed list. The multicultural virtual teams were formed based on the chosen topic before the cultural counterparts had met. The average age of the participants was 25 years. Most were male; only 12.5 percent were female. All Hong Kong participants had at least one year of full-time work experience compared with only 25 percent of the French and 15 percent of the Dutch participants. The large majority of the participants had personal experience or social links with foreigners (81.5 percent). The Hong Kong participants happened to be more experienced (88.2 percent) than the Dutch (78.4 percent) or the French (76.2 percent). They all felt the same wish to collaborate with participants from different national cultures (m = 7.23,SD = 1.57). Only 17.6 percent had previous experience working in a multicultural team. The more experienced were the Dutch (24.3 percent), then the Hong Kong participants (15.15 percent), and lastly the French (9.5 percent). As such, the impact of national culture was mitigated by a variety of factors that varied significantly across the composition of the teams.

HKNET5 HKNET5 introduced yet another national culture—the United States. In this case a small number of students (10) from the University of Central Florida were involved as “consultants” to each of the teams composed of participants similar to those of HKNET4. There were 45 part-time MScEC students from Hong Kong, 65 full-time Netherlands students (Industrial Engineering from Eindhoven and MIS from Tilburg University), as well as 21 full-time MBA students from l’École Supérieure d’Administration de Grenoble (France).

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Cross-Cultural Perspectives on Knowledge Management The degree of involvement of the U.S. participants varied widely as did their impact on the teams. In some cases, the U.S. participants were actively involved and were received positively for their contribution by their Euro-Asian teammates. In other cases, the U.S. participants were marginalized. In some cases there was virtually no impact as a result of negligible involvement of the U.S. participants. The U.S. participants were particularly disadvantaged by time differences. Hong Kong and European team members could comfortably interact synchronously, because evening in Hong Kong is midday in Europe. Such, however, was not the case with the U.S. students, who had to arrive at the break of dawn to participate synchronously. This, needless to say, created a difficulty that influenced the degree of U.S. participation.

HKNET6 HKNET6 formalized the inclusion of U.S. participants from the University of Central Florida as full team members and was dubbed OHKNET to recognize the home base of the U.S. participants—Orlando, Florida. However, HKNET6 also saw the withdrawal of French participation, which had created intrateam conflict from a European perspective in previous years. The end result was more balanced and harmonious team participation. A much more globally robust national cultural presence was exhibited, given the presence of three continents spread around the world. Added attention was given to integration of the team electronic chapter deliverables into an electronic book, which further enhanced the unity of the end product and raised the influence of national cultural issues across teams as well as within teams. From a KM perspective, HKNET6 was especially illustrative in terms of creation, storage/retrieval, and transfer of information. A number of special roles and behaviors of team members were noted to directly influence team success. For example, some team members tended to adopt “shepherd” roles in keeping other members engaged in knowledge creation and transfer. Other team members might perform more of a “librarian” role in organizing and storing information for easy retrieval by others. Those teams that exhibited a full set of specialized roles tended to outperform their counterparts and were much more adept at managing conflict.

HKNET7 HKNET7 (dubbed BOHKNET) introduced yet another national culture: Mainland Chinese from the Beijing University of Technology’s School of Software Engineering. The ‘B’ was added to OHKNET to recognize Beijing as the home base of the Chinese participants. However, HKNET7 also saw the withdrawal of U.S. student participation, although the U.S. instructor acted as a consultant to the project while on sabbatical. HKNET7 was especially interesting in bringing together two Asian cultures. It became quickly apparent that Hong Kong and Mainland Chinese were very distinct from a national culture perspective. In particular, power distance and accommodation of uncertainty were notably differentiated. Mainland Chinese were particularly accustomed to assigned team leadership and a preference for reduction of uncertainty that was not commonly found among Hong Kong or Dutch participants. The end result was tension and difficulty as teams struggled to complete the task.

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The additional of Mainland Chinese in HKNET7 had special KM implications with respect to aspects of information creation, sharing, and dissemination compatible with project objectives. As noted, the Mainland Chinese were not as personally experienced in working collaboratively in a self-guided manner, so they were often looking for direction and generally uncomfortable with knowledge creation and sharing in the absence of leadership. The traditional hierarchical orientation and tendency to uncertainty avoidance further inhibited dissemination through fears of being incomplete and not wanting to take initiative. A sense of not wanting to lose face only exacerbated problems in knowledge sharing as the Mainland Chinese were less confident in their ability to express themselves effectively and overly worried about the reaction of other team members.

FINDINGS This section summarizes the findings with special emphasis on the implications of national culture and dynamics of cultural adaptation in the context of KM as experienced over seven years of the HKNET project. Data was collected throughout each project with a pre- and post-test questionnaire complemented by team interactions captured through forum contributions as well as assessment of deliverables. Analysis was both quantitative and qualitative in this regard, as reported in the following sections.

Differences in Experience and Expectations The technological familiarity of the Hong Kong students was considerably less than that of the Dutch students during the first few years of the project. Substantial differences existed between the groups during the first two years in terms of previous multicultural team experience and working experience in general (as illustrated in Table 7.2) that began to dissipate in year three and was no longer an issue in following years. It is important to remember that the Hong Kong participants were part-time students. In general, however, neither Hong Kong nor Dutch had experience in multicultural teams supported by groupware other than e-mail. Consistently, fewer than 20 percent of the respondents mentioned having used other remote IT tools such as Lotus Notes, GroupSystems, and videoconferencing. The differences between HK and Dutch participants were borne out in terms of expected problems as measured in a pre-test and actual problems experienced based on a post-test, as illustrated in Table 7.3. Table 7.2 Experience of HK and Dutch respondents Experience

HKNET1

HKNET2

HKNET3

HK

Dutch

HK

Dutch

HK

Dutch

Multicultural team

26%

40%

70%

19%

32%

42%

Remote collaboration

27%

13%

56%

42%

31%

37%

Working > 1 year

100%

7%

100%

8%

89%

17%

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Cross-Cultural Perspectives on Knowledge Management Table 7.3 Expected and encountered problems HKNET1

Hong Kong

Dutch

Pre-test

1. Technical problems 2. Time pressure 3. Different study background

1. Time pressure 2. Technical problems 3. Different study background

Post-test

1. Technical problems 2. Different study background 3. Time pressure

1. Lack of face-to-face contact 2. Poor interaction 3. Technical problems

HKNET2

Hong Kong

Dutch

Pre-test

1. Time pressure 2. Lack of interaction 3. Technical problems

1. Different way of working 2. Cultural difference 3. Lack of face-to-face contact

Post-test

1. Time pressure 2. Lack of interaction 3. Technical problems

1. Lack of interaction 2. Time pressure 3. Lack of face-to-face contact

HKNET3

Hong Kong

Dutch

Pre-test

1. Lack of interaction 2. Language difficulties 3. Cultural difference

1. Cultural difference 2. Lack of face-to-face contact 3. Different way of working

Post-test

1. Lack of interaction 2. Lack of face-to-face contact 3. Time pressure

1. Lack of interaction 2. Lack of face-to-face contact 3. Different way of working

HKNET1 Hong Kong participants were particularly concerned about technical problems, as might be expected given their general lack of technical experience. By HKNET2, the technical environment had improved, as had the experience of Hong Kong students. By HKNET3, technical problems were no longer noted as a concern either before or after the project, and few differences existed between Hong Kong and Dutch experience of technology. HKNET2 Hong Kong participants were especially noteworthy in terms of their high levels of remote collaboration and multicultural team experience relative to their Dutch counterparts (Table 7.2). As such, the Hong Kong students had a much better idea of problems to expect, which is indicated in their pre- and post-test consistency in Table 7.3. Although many differences (e.g., technology familiarity) effectively disappeared after the first three years, a number of other differences remained. For example, lack of interaction was noted consistently by Hong Kong and Dutch participants. However, lack of face-to-face contact was consistently rated more highly by the Dutch in terms of problems anticipated and encountered. The Hong Kong students continued to have significantly more work experience than the Dutch, which gave them more confidence in working in teams. However, the Hong Kong participants were more concerned with time pressure, since they were also working full-time. The addition of the French, U.S., and Mainland Chinese students amplified differences in experiences and expectations. The French were not especially experienced but

The Influence of National Culture on Knowledge Management in Virtual Teams had rather high expectations that went unrealized, in part due to their own failure to attain the confidence of the other team members. The U.S. students were severely hampered by time differences and also lacked international experience. They were, however, respected by the other team members and particularly relied upon for their English skills. The Mainland Chinese students were least experienced but also had lower expectations. They had not historically been involved in projects in which they had positions of authority and generally felt uncomfortable in times of high uncertainty.

Hierarchy and Leadership The item “Any kind of relationship had to be structured hierarchically to obtain harmony” adapted from the previous measure of Guanxi (Bond and Hwang 1986) was assessed on a 5-point Likert scale (-2 = Strongly Disagree, +2 = Strongly Agree). The results of the ANOVA on the pre-test indicated a significant cultural main effect (p = .0058). As depicted in the left part of Figure 7.1, the Hong Kong participants have different conceptions of the link between “hierarchy and harmony” (m = 0.15, SD = 0.92: Neutral/Agree) than do the French (m = –0.38, SD = 0.92: Neutral/Disagree) and the Dutch (m = –0.58, SD = 0.86: Disagree). The ANOVA conducted on the same question in the post-test revealed no significant Culture main effect. The results (presented in the right part of Figure 7.1) show that most of the participants reached a consensus and formed a multicultural virtual team norm (mHK = 0.67, SD = 0.66: Agree; mFR = 0.31, SD = 0.88: Agree; mNL = 0.04, SD = 0.94: Agree). The standard student-t pairedtest comparison confirmed the results of the ANOVA in terms of a significant attitude change between the pre-test and the post-test (t(81) = –4.75, p<.0001). We also asked, “How much is the presence of a leader in the group required?” (on a 10-point scale, from 1 = not at all, to 10 = very much). The ANOVA conducted on that item in the pre-test revealed a significant Culture main effect (see Figure 7.2). Indeed,

Figure 7.1 Significant attitude change between the pre-test and post-test on the item “Any kind of relationship had to be structured hierarchically to obtain harmony” on a 5-point scale (From –2 = Strongly Disagree to +2 = Strongly Agree).

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Cross-Cultural Perspectives on Knowledge Management Figure 7.2 Convergence between the pre-test and post-test on the item “How much is the presence of a leader in the group required?” on a 10-point scale, from 1 = not at all, to 10 = very much.

the French (m = 6.421, SD = 2.143), the Dutch (m = 7.135, SD = 1.766) and the Hong Kong participants (m = 8.577, SD = 1.332) answered this item differe ntly. The results of the ANOVA conducted on the same item in the post-test revealed no significant Culture main effect (see Figure 7.2.). As represented in Figure 7.2, after participating in the project the participants converged on that item (mFR = 6.63, SD = 2.306; mNL = 6.027, SD = 3.096; mHK = 7.19, SD = 2.89). The Dutch participants (t(36) = 2.003, p = .05) and the Hong Kong participants (t(25) = 2.156, p = .04) changed their opinions between the pre-test and the post-test. The results of the ANOVA conducted on the post-test indicated no Culture/Cultural Diversity interaction effect and a single Cultural Diversity main effect (F(1,75) = 6.263, p = .0145) on the dependent variable “leadership requirement.” This effect indicated that the participants did not answer differently to the pre-test and post-test questionnaires with respect to the cultural diversity of the multicultural virtual team they belonged to, except for the item that characterized leadership. Indeed, the unpaired comparison test indicated clearly that the participants that belonged to the bicultural multicultural virtual team (m = 5.563, SD = 2.994) considered the presence of a leader to be significantly (t(93) = –2.073, p = .0409) less required than the participants that belonged to the tricultural virtual teams (m = 6.857, SD = 2.816). From a descriptive perspective, the answers of the participants to the items relative to the “emergent style of leadership” indicated that the low social diversity multicultural virtual teams (bicultural) related indifferently to a leadership oriented task (51 percent), rotating leadership (43 percent), or declared that no particular participants/teams took the lead (30 percent). In the tricultural condition, 68 percent of the participants indicated that the leadership was oriented toward the task and the time schedule, 39 percent that each team had its own national team leader, and 30 percent that no particular participants/teams took the lead. The answer to the item relative to the “type of emergent conflict” congruently indicated that bicultural virtual teams encountered mainly organizational conflicts relative to time issues (47 percent), whereas the tricultural virtual teams encountered cognitive conflicts related to theoretical issues such as problem definition (39 percent).

The Influence of National Culture on Knowledge Management in Virtual Teams Aspects of hierarchy and leadership were especially moderated by the national culture composition of tricultural teams. Those teams that had U.S. membership in addition to Dutch and Hong Kong Chinese tended to be more relaxed because the dominant orientation within the groups favored a more egalitarian and shared style of working with hierarchy, and leadership became more emergent as situations warranted. In contrast, when Mainland Chinese were mixed with Dutch and Hong Kong Chinese in tricultural teams, hierarchy and leadership became more pronounced and perceived as more important, especially in encouraging contribution by the Mainland Chinese. As such, different cultural dominance within the tricultural teams tended to influence the perceived importance and impact of hierarchy and leadership which, in turn, influenced aspects of KM (e.g., knowledge creation, sharing, and dissemination) compatible with project objectives.

Cultural Learning Cultural learning was a primary focus throughout the seven years of the HKNET program. Issues of culture arose in a number of ways. •

•

For example, some Dutch students claimed that their Hong Kong colleagues were doing everything strictly by the rules. This could work out both negatively (“They don’t show much initiative. Tell them what to do and they will. They won’t do ‘anything’ if they were not told what to do”) and positively (“They feel very responsible about their tasks. You can really count on them that they will do their job”). The following quote of a Hong Kong student reflects the general opinion of the Hong Kong students about their Dutch teammates: “They are open-minded, outspoken and really concerned about their individual performance.” Some Hong Kong students were annoyed with the Dutch individualistic behavior: “They stick to their own interest, do not try to reach consensus with their counterparts.” And others noticed that “they did not follow the rules of the game.” One student described the difference between both cultures as “Netherlands: more creative and innovative; Hong Kong: prudent but effective.”

All students were also asked to indicate what they have learned about their own culture during the project. Many of the Dutch students felt that they did not learn much new about themselves. Some observed a direct and open-minded approach to communication which seemed to be typically Dutch (“Dutch people have an attitude characterized by ‘well, let me tell you how to do it’ and are pretty persistent and active.”) On the Hong Kong side, several students observed themselves to be more passive than their Dutch counterparts. They found themselves more inclined to work collectively and to avoid issues of conflict. These findings were illustrated by the following quotes from three different study participants from Hong Kong: “We are relatively less active and would tend to compromise when dispute arises.” “More group sense, not to stand out too much from the team. Help other members who are considered less capable. Able to fulfill the deadlines.” “The Hong Kong team members are relatively passive, but they are also very cooperative and easy going.”

Additional attention was placed on the question of cultural difference within team dynamics. In particular, the researchers were interested in seeing the degree of consensus

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Cross-Cultural Perspectives on Knowledge Management Table 7.4 Pre- and post-test characterization rankings HK self Cultural traits Tolerant

HK => NL

NL self

NL => HK

Pre

Post

Pre

Post

Pre

Post

Pre

Post

1

10

6

8

1

3

8

10

Modest

8

7

3

4

7

9

1

8

Practical

2

1

7

5

2

1

5

4

Ambitious

9

6

10

10

3

5

3

1

Honest

7

8

2

2

6

4

6

6

Courteous

10

5

4

7

10

8

4

5

Conventional

6

9

8

3

11

10

7

9

Arrogant

11

11

11

9

8

11

11

11

Friendly

4

4

1

1

5

2

2

3

Industrious

3

3

9

11

9

7

9

2

Progressive

5

2

5

6

4

6

10

7

among students with respect to attributes of their own culture. On the questionnaire answered by the students prior to project initiation, they were asked to identify their own culture characteristics from a list of 39 attributes. At the conclusion of the project, the same list was presented to the students, but this time they were asked to identify the cultural attributes of their counterparts. •

•

In the pre-test, Hong Kong students felt that they were culturally collectivist, friendly, practical, sincere, reliable, honest, courteous, tolerant, efficient, and warm. At the conclusion of the project, Netherlands students felt the Hong Kong students were friendly, sincere, tolerant, reserved, reliable, honest, quiet, modest, collectivist, and conventional. Overall there was agreement among the Hong Kong and Netherlands students on six of the ten attributes. In the pre-test, Netherlands students felt that they were tolerant, straightforward, ambitious, practical, reliable, friendly, efficient, sincere, honest, and progressive. At the conclusion of the project, Hong Kong students felt the Netherlands students were friendly, sincere, practical, straightforward, efficient, reliable, courteous, individualistic, warm, and tolerant. Overall there was agreement among the Hong Kong and Netherlands students on seven of the ten attributes.

In summary, common to both Dutch and Hong Kong students were attributes of friendliness, tolerance, sincerity, and reliability. There was additional consensus that Hong Kong participants were collectivist and honest and that the Dutch were practical, straightforward, and efficient. In HKNET3, students were asked to rank themselves and their counterparts both before and after the project on 11 cultural traits chosen from those used in classical ethnic stereotype studies (Grant and Holmes 1981; Katz and Braly 1933, 1935; Kirby and Gardner 1972; Lippman 1922; Stangor 2001). The results are illustrated in Table 7.4. The cultures definitely perceived themselves as different. It would appear that the teams learned about each other’s culture as well as that of their counterparts over the course of the project. For example, the HK students concluded they were much less

The Influence of National Culture on Knowledge Management in Virtual Teams tolerant after the project than their initial self-perception. Similarly, the HK students had initially expected the Dutch to be less conventional and changed their opinion considerably. On their part, Dutch students concluded they were not nearly as modest after the project as their initial self-perception. They also noted that the HK students were much more industrious than initially expected. Some HK self ratings stayed consistent (e.g., friendliness and industriousness) as did HK perceptions of NL (e.g., friendliness, honesty, and lack of ambition). Some Dutch self ratings also stayed relatively consistent (e.g., conventional) for themselves as well as for their perception of the HK students (e.g., friendly but not quite as honest). Similarly, some ratings stayed consistent across time for both cultures (e.g., arrogance was consistently rated low).

Cultural Convergence Can we say anything about convergence between HK and NL perceptions pre- to post-test? In general, the participants reorganized the prototypical set of stereotypes for both cultures. The ethnic cognitive beliefs of the participants changed after they interacted as a group. In effect, the new cognitive beliefs became a point of reference for future interactions. More than one interaction with a different culture is necessary to be objective and to obtain less stereotypical judgments for the interaction, at least in Chinese contexts (Bond 1986). The Spearman rank correlation (–1 < rs < 1) produces some interesting results: •

•

HK->HK: rs = .38, t(9) = 1.239. The HK students’ cognitive beliefs on the definition of the self are not correlated pre-test/post-test; this is particularly linked to the items “tolerant” and “courteous.” They learned that they were less tolerant and more courteous than they initially expected. However, the NL participants both pre- and post- were consistent with the HK concluding self perception on these characteristics. HK->NL: rs = .77 t(9) = 3.541. The HK students’ cognitive beliefs concerning the NL are highly correlated pre-test/post-test. They did not change their minds after the interaction and found the NL friendly and honest, albeit lacking in ambition and industriousness.

Interestingly, the rs between NL->NL post and HK->NL post-test (matching selfdefinition of the NL with HK cognitive beliefs concerning NL after the interaction) is low: rs = .25, t(9) = 0.7745. The HK definition (e.g., perception) of the NL did not converge with the NL self-definition although they agreed on the items “friendly” and “progressive.” •

•

NL->NL: rs = .78, t(9) = 1.12. The NL students’ cognitive beliefs are highly correlated pre-test/post-test, unlike the HK participants. The NL participants were consistent concerning their self-definition. NL->HK: rs = .45, t(9) = 1.51. The NL students’ cognitive beliefs concerning the HK are not correlated in the pre-test/post-test. The NL did change their mind after the interaction and found the HK participants not to be as “modest” and “friendly” as initially anticipated, for example.

The rs between HK->HK post and NL->HK post-test (matching self-definition of the HK with NL cognitive beliefs concerning HK after the interaction) is unexpectedly

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Cross-Cultural Perspectives on Knowledge Management high: rs = .70, t(9) = 2.04. The NL perceptions of the HK converge with the HK selfdefinition (they agree on many items such as ”tolerant” (not), honest, courteous, arrogant (not), friendly, and industrious. Additional areas of cultural convergence became apparent with regards to a perceived need for leadership and the hierarchical nature of relationships. Statistical tests (MANOVA and ANOVA) revealed no significant differences between the answers collected in the second and third years of the project. Thus the results are presented for the data sum through the two years (HKNET2 and HKNET3). Analysis of variance (ANOVA) was conducted on the item “Is the presence of a leader in the group required?” and revealed a significant “Nationality” main effect (F = (1, 94) = 11.548, p = . 001) in the pre-test on a 10-point scale (from 1 = not at all, to 10 = very much). The Dutch HKNET participants predictably thought that a leader is less necessary (mNet = 6.5) than the Chinese HKNET participants (mHK = 7.8) did. It is interesting to note that the ANOVA conducted on the same item revealed no significant main effect in the post-test. Hence, the two groups reached a virtual consensus (mNet = 5.6; mHK = 6). Leadership was less important in the virtual framework than both groups expected. The student-t ‘within comparisons’ for each group shows that the Hong Kong participants significantly changed (t(44) = 5.675, p<.0001) their opinion between the pre-test (mHK = 7.8) and the post-test (mHK = 6). The same effect is observed for the Dutch who also changed their opinion significantly (t(50) = 3.294, p = .018) between the two tests. The results are summarized in Table 7.5. The ANOVA conducted on the item “Any kind of relationship had to be structured hierarchically to be harmonious” on a 5-point scale (from –2 = strongly disagree, to +2 = strongly agree) revealed a significant Nationality main effect (F = (1,104) = 43.246, p<.0001) in the pre-test. The Chinese HKNET participants (n = 52) rated that item significantly more positively (mHK = 0.4, StD = 0.72) than the Dutch HKNET participants (n = 54) did (mNet = -0.741, StD = 1). Again, it is noteworthy that the ANOVA conducted on the same item revealed no significant main effect in the posttest. The two groups reached a virtual consensus (mNet = 0.8, StD = 0.71; mHK = 0.67, StD = 0.7). The findings across the seven years of the HKNet project paint a rich picture of the knowledge management dynamics that go on in the context of virtual teams. In the next section we will discuss the implications of these findings and integrate them to provide support for a range of propositions. We additionally seek to explain some of

Table 7.5 Between and within nationality comparisons on the item “leadership” Hong Kong** nHK = 45

Pre-test * Post-test ns

The Netherlands*** nNet = 51

M

StD

M

StD

7.8

1.4

6.5

1.8

6

1.7

5.6

2

* p = .001; ** p < .0001; *** p = .018; ns: nonsignificant difference between groups in the post-test.

The Influence of National Culture on Knowledge Management in Virtual Teams the anomalies and nuances of the findings through our observations and cumulative experience.

DISCUSSION In this section, we begin by examining results that provide support for cultural convergence in teams under varying conditions. We then examine compatibility followed by aspects of satisfaction with special attention to social and professional learning. We build on these topics with considerations of technology configuration and robustness including global availability. We conclude the section with extrapolations to commercial organizations including Philips Software and implications for practice. The results relative to normative and cultural need for structure and convergence toward a norm lead us to generally support our cultural convergence proposition. Salient in this conclusion are changing perceptions of the need for hierarchy and importance of leadership. Widely variant senses of need for hierarchy converged as team members from different cultures found a way of working that, in this case, mutually saw hierarchy as important, especially on the part of French and Dutch participants. Similarly, perceptions of the importance of leadership converged with all cultures seeing leadership as less important albeit to a lesser extent than initially envisioned by the French participants. The Hong Kong participants were noteworthy in their lowered perceptions of the importance of leadership. Overall, the interactive national teams changed significantly in their normative cultural need for structure and converged toward a multicultural virtual team norm. However, it is overly simplistic to assume that this convergence would always occur in a similar way, especially in the context of more complex cultural circumstances. In a condition of high cultural diversity, the participants need to understand and integrate diverse norms and subjective meanings; we therefore assumed that the normative cultural need for hierarchical structure would emerge differently in a bicultural condition (Low social diversity) than in a tricultural condition (High social diversity). We assumed that the normative cultural need for structure would be different as a function of cultural diversity. However, the results led us to partially reject these assumptions. Indeed, the inferential analysis reveals only a single significant effect on the item “leadership requirement”: The presence of a leader appeared less necessary to the bicultural MVT than to the tricultural ones. However the descriptive results indicate that in the bicultural MVT, the response to the type of leadership was indifferent while in the tricultural MVT it was more specific and oriented toward the task and the time schedule. We conclude therefore that less cultural and social diversity requires less hierarchy and leadership. The set of results relative to pattern of feeling of compatibility led us to cautiously consider generalization. The interactive national teams did not significantly change their preexisting pattern of interpersonal compatibility toward a multicultural virtual team identity. However, the discrepancy in the feeling of compatibility between national teams was generally reduced after the virtual collaboration, followed by a general diminution of in-group favoritism (Tajfel 1981). We could argue that the Dutch reached a shared group identity and that the reciprocal prejudice of Confucian versus Western diminished during the six weeks of virtual collaboration. Under these circumstances, we

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Cross-Cultural Perspectives on Knowledge Management conclude that careful consideration needs to be given before generalizing about changes in compatibility. The set of results relative to satisfaction revealed that participants enjoyed the project to varying degrees. The lowered sense of social and professional learning reported in the post-test is troubling. The French had quite a negative attitude toward the project or perhaps had too high initial expectations possibly linked to the lack of previous experience they had of working in multicultural teams (9.5 percent). This can first be related to the dimension of Uncertainty/Avoidance, linked to the ability to apprehend stressful situations (Hofstede 1980). Indeed, the members of the French culture had more difficulties in dealing with uncertain situations including a low level of control on the outcome (the participation in the first section in the project), difficulty in mastering the English language, high group cohesion, lack of professional experience in multicultural teams, and forced compliance (Festinger 1957). The lowered sense of social and professional learning reported in the post-test for the Dutch is less striking, and the Hong Kong participants reported virtually no change. This is more encouraging but still warrants consideration. In no case did post-test results exceed pre-test expectations. Initial expectations were quite high, however, and would perhaps be tempered in future interactions. It must be considered that this was typically the first virtual team experience for the participants. The results concerning conflict were encouraging. Generally, participants usually expect the cultural differences to be a great source of problems. However, they did not experience a high level of such conflict within the multicultural virtual teams. From a technological perspective, we see lots of equifinality (i.e., the same technology configuration can be used in different ways leading toward a common result). For example, some groups arrived at a consensus during the introductory videoconference whereas others used the discussion groups to generate and prioritize research questions. One group used an electronic whiteboard to cluster and prioritize ideas as one might do in a face-to-face session. The portfolio of technology provided and associated support was recognized as important as teams worked literally 24 hours a day given time zone differences as well as their individual preferences and other demands on time (e.g., employment). Technology robustness and global availability are key in a project of this size. We have learned that this is more important than trying to match specific technology functionalities to specific virtual team processes. The processes followed in the structure provided for this project were the result of four years of evolution with the objective to be supported by a wide range of technologies. A general learning management system such as Blackboard meets the basic requirements, although it is clear that synchronous communication and convergence could use improved technological support. In this study, videoconferencing was seen as less important than Blackboard, due in part to lack of availability. The teams had limited access to videoconferencing whereas they had Webbased access to Blackboard 24 hours a day.

IMPLICATIONS FOR PRACTICE Implications of aspects of national culture with respect to KM in VTs extend beyond findings in academic contexts to experiences in multinational organizations (e.g.,

The Influence of National Culture on Knowledge Management in Virtual Teams Davison, Vogel, and Harris 2005; Saunders, Van Slyke, and Vogel 2004). For example, Philips Software (PSW) is a new Business Unit in Philips that operates as an independent software vendor in the mobile and consumer electronics market. The unit was formed in 2003. The units of PSW are located in seven locations in six countries on three continents. PSW can be characterized as a virtual organization from conception. The size of the units varies from 3 people to 30 people. National culture issues experienced by PSW are similar to those associated with the HKNET project. We have also gone forth to have experiences and examine implications with other large multinational organizations. The data presented demonstrate that different national cultures may have different preferences and different usage of knowledge management technologies. This has consequences for the usage of technologies in virtual teams in practice. For example, synchronous technology use has been shown to be effective in virtual teams. However, one must be aware that synchronous decision-making may be against the preference of some of the group members. This does not mean that synchronous time cannot be useful; rather it means that more time will have to be dedicated to guiding team members through the synchronous decision-making process as a function, in part, of group cultural composition. People from Asian cultures may require time for local convergence before they are willing to enter into global interaction. Two examples of how this can materialize in (virtual) teams are presented. The first example was observed within the HKNET project and relates to the importance of consensus and collectivism in the Confucian culture. The team members were expected to vote to arrive at a selection of the research questions. The Europeans voted and nothing seemed to happen on the Hong Kong side. A phone call between professors found that the Hong Kong students had momentarily left their computers to discuss and arrive at a local group consensus. After that they voted on screen, only submitting their vote after they had double-checked with local teammates that the vote was unanimous. The second example relates to one of the authors’ experience in an initial meeting between the 150 senior managers of a multi-billion-dollar company, formed after the merger of an Asian and a European company. This example addresses the importance of hierarchy in the Confucian culture. Group Support System technology was used to support this meeting. The managers from the Asian company did not provide any input until their most senior manager answered a question using the computer. It was interesting that the company culture determined the behavior. The European company had many Asian managers but their behavior in the meeting reflected their company culture more than their national culture. Both examples involve the use of knowledge management technology to provide input or vote on a particular problem to reach a decision. Congruently, in big virtual meetings in industry we have also experienced that hierarchy and norm of collectivism influence the behavior of the participants engaged in large-scale audio and video conferences. Lively interaction and quick responses to unexpected questions are more likely to be received from individualistic Westerners than from Asian participants who will more often feel the need to seek local consensus and receive approval from their superiors in the organizational hierarchy. These examples demonstrate that difference in sense of hierarchy and collectivism especially influences the behavior of the Confucian culture participants when using synchronous technology. We also experienced that, in case of conflict, some participants

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Cross-Cultural Perspectives on Knowledge Management prefer to use a synchronous mode of communication. The escalation of media in times of conflict may be counterproductive if the chosen media are against the preference of part of the group. For example, Westerners typically increase the richness of media in case of conflict, often going from asynchronous data exchange to synchronous data exchange or from data exchange to audio to video. In business, the ultimate step is usually to get on an airplane and meet face-to-face. The use of synchronous technologies in times of conflict may be threatening to persons from a Confucian culture. The conflict may become more pronounced because, in addition to the existing conflict, Western team members are trying to impose processes and technologies that go against the cultural protocol of the Confucian members of the team, as noted by Lee (2000). The Asians may have the need to buy more time to arrive at a local consensus, whereas the Westerners seek to impose technology that provides them with less and less time. In business, difference between cultures is also observed between Westerners using synchronous communication to solve problems. The French and the Dutch have very different ways of tackling conflict and problem solving. The Dutch, more task-oriented, will adapt a straightforward style of negotiation that will typically be supported by a set of points in an agenda to be discussed. These points will be systematically addressed and result in a consensual potential decision. Video and audio conferencing are thus efficient for the Dutch culture. The French, though, consider face-to-face as necessary to have a real discussion and reach a stable consensus. A major threat that was observed and common with the Confucian culture is that French and Hong Kong participants will agree via synchronous mode and then later rethink the decision. This is particularly frustrating to the Dutch. For the French, real discussion typically involved some social activities that are important to mediate conflicts and influence the decision to be taken. They tend to have more problems with structured agendas required for video/audio conferences that lack social interaction. The French recognize that a lot of value can emerge from mixing different cultures. At the same time, they fear that misunderstanding and conflict will emerge based on cultural differences. This reinforces their conviction that face-to-face interaction is important. In business, we have observed congruent behavior, and noted that the French typically ask to be provided with training on cultural issues and multicultural behavior to ensure fluency of communication. They also emphasize the importance of social events and activities and the importance of meeting face-to-face to have a better grasp on the other partners of the interaction. They are clearly concerned about their lack of abilities in English and want to balance this shortcoming through meeting socially where they feel more comfortable and could potentially better influence decisions. The research data also demonstrated that asynchronous technology use is important to elaborate on research questions. The main advantage of asynchronous time in virtual teams is to allow the participants to work out the problem in more detail. This turns out to be particularly useful for participants with lower social communication skills or language deficiencies. Indeed, experience has shown that French participants needed more time to elaborate on their text and felt less secure about their knowledge of English. Asynchronous time also provides the space desired by the Confucian participants to review the work at the local level to be more cohesive. We also observed in industry that the main problem of asynchronous communication is the overload of information that needs to be read and the frustrations of delayed feedback. Interestingly, one of the

The Influence of National Culture on Knowledge Management in Virtual Teams teams in the HKNET project worked out a plan to tackle the information overload. They appointed a local reader and rotated that role every week: one person per local team was reading all the asynchronous messages and summarized them for the rest of the local team members. The use of technology required the development of additional technology such as developing an efficient system to monitor asynchronous messaging over different time zones. The HKNET research also holds some lessons for providers of technologies. It is emphasized again that, because each technology has pros and cons that vary as a function of culture and team desires, a single technology will not be sufficient and a portfolio will be required. Both synchronous and asynchronous technologies should be available and mixing of the two should be supported. However, no single mixing recipe can be provided. As such, integration and ease of movement from one technology to the next is paramount and needs to be fluid and flexible to meet the varying needs of teams as circumstances dictate in the tasks at hand and as the team’s characteristics evolve. Familiarity also plays a role here. People have a tendency to focus their attention on one form of electronic input. For many people, this is the inbox of their e-mail system. We have experienced that it is difficult to expand perspectives and include synchronous technologies. We have also experienced in practice that even if people are convinced of the merits of synchronous technologies, it requires process or organizational pressure to move them. Our research has special implications for virtual team facilitators and managers. Earlier research indicated that different virtual teams experience different problems, even when the circumstances are similar. We have described this using an onion-skin model that suggests that virtual teams have to work through layers of problems to be able to operate effectively (Rutkowski et al. 2002b). Examples of layers are technology, motivation, and professional as well as national culture. Our current research indicates that the relation between culture, information technologies, and process/outcome are dynamic. This means that teams adapt their culture in terms of norms and pre-existing patterns of cultural compatibility. Teams do not only experience different layers of problems while working in virtual teams but the layers are also dynamic. A problem that one team has solved may reappear for this team or another team in a different form or shape. Ultimately, at the cultural layer level, participants expect differences from the start and the effect is that (1) some will pass over it to keep the process working smoothly in the VTs or (2) others will typically attribute failure to culture rather than to recognize that the problems concern the VT process and other issues such as motivation. Perceived impact and experiences vary significantly within and between teams. Virtual teams in practice will experience a greater variety of tasks, which will make it even more difficult to agree upon the lessons learned and the next steps for the virtual organization. A specific issue for virtual teams at the organization level is progress tracking. It is difficult to track the progress of larger numbers of individuals and virtual teams. Our research indicates that different cultures use different technologies. This makes it more difficult to set up a tracking system. Our research further indicates that one should not enforce a specific technology upon different cultures, which makes it more difficult to track progress in quantitative terms. For example, the fact that teams do not use a synchronous technology (e.g., chat) for convergence could be an early warning for lack of progress in a Western team. It should not be perceived as an indication of lack

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Cross-Cultural Perspectives on Knowledge Management of progress in a team with Chinese members, given their preference for asynchronous technology. It is not yet clear how it should be interpreted in a team with a mixture of Eastern and Western members, like the ones studied here. It is even more complicated in that it could be a warning sign for a team in its initial project, but in later projects, they may have adapted their culture and their use of technology may well be justifiably different.

CONCLUSION Virtual teams are here to stay, and knowledge management is a perennial issue with many challenges, not the least of which includes the impact and implications of national culture. The conclusions that we draw here are based on seven years of findings associated with the HKNET project plus experience with virtual teams in a variety of organizations. In general, it would appear that national culture drives, to some extent, the choice of technology (e.g., through desire for synchronous or asynchronous driven by uncertainty reduction preference). This, in turn, influences the processes and outcomes of team interactions due, in part, to technology characteristics. These differences in process and outcome can then feed back to influence national culture, at least temporarily, in the context of the team interactions. Thus, the circle is complete and can continue, iteratively, to influence and affect team members, resulting in cultural convergence to accomplish agreed upon tasks in a knowledge management context. The degree to which this has a lasting effect as team members move from one project to the next is an important topic for future research.

REFERENCES Alavi, M. A., and D. E. Leidner 2001. Review: Knowledge management and knowledge management systems: conceptual foundations and research issues. MIS Quarterly 25(1): 107–36. Bond, M. H. 1986. The handbook of Chinese psychology. New York: Oxford University Press. Bond, M. H., and K. K. Hwang 1986. The social psychology of Chinese people. In The psychology of Chinese People, ed. M. H. Bond, 213–66. Hong Kong: Oxford University Press. Briley, D. A., M. W. Morris, and I. Simonson 2000. Reasons as carriers of culture: Dynamic vs. dispositional models of cultural influence on decision making. Journal of Consumer Research 27:157–78. Davison, R., D. Vogel, and R. Harris 2005. The e-transformation of western China. Communications of the ACM 48(4): 62–66. Dustdar, S., and G. J. Hofstede 1999. Videoconferencing across cultures: A conceptual framework for floor control issues. Journal of Information Technology (14): 161–69. Festinger, L. 1957. A theory of cognitive dissonance. Stanford, CA: Stanford University Press. Fiedler, F. E. 1965. A contingency model of leadership effectiveness. In Group Processes, ed. L. Berkowitz, 85–107. New York: Academic Press. Genuchten, M., D. Vogel, A. Rutkowski, and C. Saunders 2005. HKNET: Instilling realism into the study of emerging trends. Communications of AIS 15:357–70. http://cais.isworld.org/ contents.asp. Grant, P. R. and J. G. Holmes, J. G. 1981. The integration of implicit personality theory schemas and stereotype images. Social Psychology Quarterly 44(2): 107–15. Gergen, K. J., A. L. Massey, A. Gulerce, and M. Misra 1996. Psychological science in cultural context. American Psychologist 51:496–503.

The Influence of National Culture on Knowledge Management in Virtual Teams Griffith, T. L., J. E. Sawyer, and M. A. Neale 2003. Virtualness and knowledge in teams: Managing the love triangle of organizations, individuals, and information technology. MIS Quarterly 27(2): 265–87. Gudykunst, W., and Y. Kim 1988. Theories in intercultural communication. Newbury Park, CA: Sage. Hong, Y. Y., M. W. Morris, C. Chiu, and V. Benet-Martinez 2000. Multi-cultural minds: A dynamic constructivist approach to culture and cognition. American Psychologist 55(7): 709–20. Hofstede, G. 1980. Culture’s consequences: International differences in work related values. London: Sage Publications. Hofstede, G. H. 1983. National cultures revisited. Behavior Science Research 18(4): 285–305. Hwang, K. K. 1987. Face and favor: the Chinese power game. American Journal of Sociology. 92: 944–74. Katz, D., and K. Braly 1933. Racial stereotypes of one hundred undergraduates. Journal of Abnormal and Social Psychology 28: 280–90. ———. 1935. Racial prejudice and racial stereotypes. Journal of Abnormal and Social Psychology 30:175–93. Kirby, D. M., and R. C. Gardner 1972. Ethnic stereotypes: Norms on 208 words typically used in their assessment. Canadian Journal of Psychology 26: 140–54. Kwok, R., J. Ma and D. Vogel 2002. Assessing GSS and facilitation effect on knowledge acquisition. Journal of MIS 19(3): 185–229. Lee, O. 2000. The role of cultural protocol in media choice in a Confucian virtual workplace. IEEE Transactions on Professional Communication 43(2): 196–210. Lippman, W. 1922. Public opinion. New York: Harcourt Brace. McGrath, J. E. 1984. Group: interaction and performance. New York: Prentice Hall. Mejias, R., M. Sheppard, D. Vogel, and L. Lazaneo 1997. Consensus and perceived satisfaction levels: A cross-cultural comparison of GSS and non-GSS outcomes within and between the U.S. and Mexico. Journal of Management Information Systems 13(3): 137–61. Myers, M. D., and F. B. Tan 2002. Beyond model of national culture in information systems research. Journal of Global Information Management 10(1): 24–32. Qureshi, S., and D. Vogel 2001. Adaptiveness in virtual teams: Organizational challenges and research directions. Group Decision and Negotiation 10(1): 27–46. Rijsman, J. B. 1997. Social diversity: A social psychological analysis and some implications for groups and organizations. European Journal of Work and Organizational Psychology 6(2): 139–52. Rutkowski, A., D. Vogel, T. Bemelmans, and M. Genuchten 2002a. Group support systems and virtual collaboration: The HKNET project. Group Decision and Negotiation 11(2): 101–25. Rutkowski, A., D. Vogel, M. Genuchten, T. Bemelmans, and M. Favier 2002b. E-collaboration: The reality of virtuality. IEEE Transactions on Professional Communication 45(4): 219–30. Saunders, C., C. Van Slyke, and D. Vogel 2004. My time or yours? Managing time visions in global virtual teams. Academy of Management Executive, 18(1): 19–31. Stangor, C. 2001. Stereotypes and prejudice: Essential readings. Philadelphia: Psychology Press. Tajfel, H. 1981. Human groups and social categories. Cambridge: Cambridge University Press. Triandis, H. C. 1994. Culture and social behavior. New York: McGraw-Hill. Van der Vegt, G., B. Ermans, and E. van de Vliert (1999). Effects of interdependencies in project teams. Journal of Social Psychology 139(2): 202–14. Vogel, D., R. Davison, and R. Shroff 2001a. Sociocultural learning: A perspective on GSS enabled global education. Communications of AIS 7(9): 1–41. http://cais.isworld.org/contents.asp. Vogel, D., M. Genuchten, D. Lou, S. Verveen, M. van Eekhout, and T. Adams 2001b. Exploratory research on the role of national and professional cultures in a distributed learning project. IEEE Transactions on Professional Communication 44(2): 114–25.

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8 People’s Twist: The Cultural Standard of Loyalty and Performance in Former Socialist Economies1 Gerhard Fink and Maren Lehmann

ABSTRACT Culture is a complex frame of perceiving, observing, understanding, judging, and acting. Normal behavior within these frames (e.g., the ways people normally do these things) can be called cultural standards (Thomas 1993). This chapter analyzes the emergence of cultural standards that are specific to the former socialist economies. Knowledge management provokes views outside and inside such cultural frames, and it couples these views. This coupling twists the different cultures across their borders: It links up internal and external knowledge within the coupled cultural frames. Aspects of knowledge management are analyzed in light of recent literature, research, and experience and show how a specific culture of loyalty and performance emerged. The conclusion is that these more or less closed states tried to translate the inside-out and outside-in view into top-down and bottom-up control, and then tried to ignore the outside-in view as well as the bottom-up-control; the effects were totalitarianism and isolation. The term “people’s twist” is the retranslation of this hierarchical control into heterarchical observing, thus the reinvention of the outsidein view as well as the bottom-up control. This special kind of knowledge management functions by concealing effective knowledge from state control and shifting it to private networking. Our argument is that this concealing and shifting of effective knowledge from political control saves and reestablishes market rationality inside planning rationality. Thus, the people’s twist makes possible what we call a socialist economy: It establishes cultural standards specific to the socialist economy, which help to secure survival in a culture of fear.

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INTRODUCTION Since managers of large corporations are more and more becoming cost savers and know less and less about the tacit and explicit knowledge required to perform actual work, knowledge management is becoming an increasingly important issue in management. The main argument for almost any merger or acquisition is the cost-saving aspect. Heralded synergies will allow managers to reduce staff, in large mergers often by the thousands. Usually the most qualified staff leave first as is reflected by the proverb “Leave the best and merge the rest.” Even in fast-food chains, high personnel turnover is a good predictor of decreased efficiency, because tacit knowledge gets lost (Kacmar et al. 2006). Mergers and acquisitions are often based on the assumption that the knowledge in the acquiring firm is superior to any other knowledge and, thus, staff in the acquired firms should be grateful to receive that superior knowledge. Surprisingly for those managers the staff of acquired firms often remains passive if not in outright opposition to accepting the “new and superior” management knowledge. Reportedly passivity and resistance by the local staff are also at the core of many privatizations in former socialist countries. Usually this is ascribed to the “communist heritage.” Rightly so, albeit that the presumptions that the observed behavior had become a sort of national cultural value under socialism are utterly wrong. Passivity is not a value, as can be easily clarified if reference is made to the literature on values (Hofstede 2001; House et al. 2004; Kluckhohn and Strodtbeck 1961).2 It was a specific cultural standard to be applied in public life, since in socialist economies passivity was advised where political risk was to be avoided. Otherwise, in private circles, which were actually established at the workplace, people were very active about securing survival and had developed a particular and very self-conscious form of individualism to get the best out of the system. In a way, nobody was unemployed, but nobody worked hard. Hence, there were not enough supplies in the shop, but everyone had sufficient supplies at home. There was no political freedom, but there was freedom at the workplace. This chapter shows that in the socialist economies in Europe, workers had learned to protect their productive knowledge from being exploited by the rulers. They had learned to transfer their knowledge from the workplace to the private sphere, where inequality in performance and knowledge is more rewarding than equality. People exported their productive knowledge from the firm and reimported it only when needed. They established a kind of subversive privacy at the workplace. This transfer and reimport of productive knowledge is identified as a specific form of knowledge management prevailing in socialist systems, which produces a radical, very self-conscious individuality underneath the surface of a collective. In this aspect, former socialist economies combine two forms of rigid social control: official integration at the organizational level (the collective) and private integration (in the niche) at the society level. Despite the permanent threat at the society level (or because of the threat), the primary small work collectives became the nucleus of privacy and lasting friendship. Despite the rhetoric of “tight plans” and “plan targets of unprecedented difficulty” there was a lot of freedom at the workplace, as plans were quite often changed so that targets were met ex post facto. That freedom was such that after 1989 people felt that “first the Berlin Wall fell; next we lost our freedom at the workplace!” Sociologically speaking, socialist economies considered economy and politics as identical and called the functioning of this identity work or

People’s Twist labor. Formal organization (bureaucracy) was employed as the appropriate social field of action. It was exactly this work/organization entanglement that allowed the transfer of knowledge to the private sphere and differentiation of private performance mentioned previously. There were attractive places outside of the organization, but within society. People not only entered them, but used their positions within organizations as places of social interaction (i.e. socialization in the sense of Nonaka and Takeuchi 1995). This chapter is organized as follows. After this introduction there is a brief description of the core elements of state-of-the-art literature on knowledge management, followed by an account of the functioning of the socialist system: first, a theoretical part describing the historic development of relations between individuals, classes, and masses, which are related to the notions of work; Lenin’s invention of cadres; and the unavoidable conflict between expectations of performance and loyalty. Next there is an account of the functioning of the socialist planned economy by considering the four core elements of work life: the impact of recurring purges, humiliations, and other forms of degradation, the small work collective as the nucleus of lasting friendship and social relations, the actual functioning of the planning system, and the quest for efficiency with measures of socialist competition. Finally, there is a short reflection on the reduction of knowledge to labor that was reflected by this order: “Send the intellectuals back to production!” Performance and creativity were forgotten by the rulers when it came to securing loyalty and power. Consequently, people integrated their tacit and explicit knowledge into their individual private life wherever they were—at work or at home. This practice of privacy can be called “subversive surviving.”

THEORETICAL PERSPECTIVES In this section there is brief reference made to two streams of theoretical literature: cultural standards and knowledge management. “By cultural standards we understand all kinds of perceiving, thinking, judging, and acting, which in a given culture are considered by the vast majority of the individuals for themselves and others as normal, self-evident, typical, and obligatory” (Thomas 1993, 381, translation by Fink, Neyer, and Kölling 2007). Cultural standards are interrelated with cultural values (society level) and personality traits (individual level), but are distinct constructs. Values can be understood to function as a general guidance to select appropriate modes of behavior from a given repertoire to solve common human problems within a society (Kluckhohn and Strodbeck 1961) and personality traits characterize the disposition of individuals to behave in certain ways. Individuals select their actual mode of behavior from the available repertoire of cultural standards depending on the problem to be solved, the values in a society, and their personal disposition and interest (Fink, Neyer, and Kölling 2007). When considering the functioning of the former socialist system from a knowledge management perspective it is necessary to raise the issue of whether the motivational foundations of knowledge management were given, as in the models of Nonaka and Takeuchi (1995), Gupta and Govindarajan (2000), and Glisby and Holden (2002). Can tacit knowledge be mobilized by socialization at the workplace (i.e., transferred as tacit knowledge) and at the next stage converted into explicit knowledge as described by Nonaka and Takeuchi (1995)?

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Cross-Cultural Perspectives on Knowledge Management Knowledge management is, of course, also to a large extent culture dependent (for details see also Chapter 4, “Cultural Stretch: Knowledge Transfer and Disconcerting Resistance to Absorption and Application”). Nonaka and Takeuchi (1995) based their theory of knowledge creation on the general distinction between tacit knowledge (implicit and not codified) and explicit knowledge (explicitly expressed and codified, written text). This distinction is at the core of behavioral rules in socialist economies. However, in an atmosphere of high political pressure and fear, transfer of explicit knowledge was highly risky and, thus, impeded. Specific forms of communication and tacit knowledge transfer were developed. This observation reinforces the findings of Glisby and Holden (2002), who have shown that all four modes of the Nonaka/Takeuchi (1995) model are culture dependent. The model of Gupta and Govindarajan (2000) distinguishes issues that are related to the sender of knowledge (perceived value and motivation to share knowledge), the prospective receiver (motivation to learn and the ability to recognize the value of new knowledge), and to the richness of transmission channels. The logic of the socialist economic and political system had a direct bearing on the components of the Gupta/ Govindarajan (2000) concept. Thus, it also proved to be culture dependent. Culture variously influences what is understood by tacit or explicit knowledge and how it can be communicated, perceived, and absorbed. What for West Europeans could be clear and explicit is not necessarily so for East Europeans, who might need additional tacit information in order to understand the explicit messages and to be able to absorb that knowledge. The same applies in the reverse direction. “If the context changes (e.g., culture), knowledge also changes.” (Venzin 1998 as quoted by Holden and von Kortzfleisch 2004, 2). However, when asking whether differences in management techniques do exist, one simultaneously has to ask what kind of decisions and actions should be taken to integrate what used to be separate, and as a consequence of that integration, what will be separated which used to be integrated.

THE FUNCTIONING OF THE SOCIALIST SYSTEM Here the socialist economy will be considered an economy managed by an authoritarian, bureaucratic organization (a party). This management is based on a conventional understanding of economy as a kind of a nation-state’s household and, therefore, as a single corporation of more or less totally included people. Thus, this economy refers to the classical concept of an oikos (a closed economical and political unit; a complete household under a patron; in the strict sense of Greek tradition and Roman law it is the elementary unit of a state cf. Brunner 1980). The political task of management is to take individuals and place them inside this economy, without respecting people’s everyday life, values, commitments, and other personal relationships. In earlier times of communist power such measures were deliberately taken to degrade intellectuals and humiliate the bourgeois, in order to “isolate enemies of the working population from the public sphere” (Paríková 2004, 51). This kind of management views people as empty, abstract individuals, loosely coupled with a substratum: the masses, which are to be organized rigidly to secure loyalty. Thus it produces cadres, not managers. By contrast, it is quite clear that individuals are thinking and feeling observers—not empty containers—that they are somehow integrated in families, groups, or teams,

People’s Twist whose internal traditions and rules undermine this kind of management as does the thinking of individuals. In effect, socialist management couples its ignorance of people’s thoughts and commitments with a suspicion concerning those thoughts and commitments. Sociologically speaking, communication is under permanent suspicion of undermining organizational control, because it does not respect the boundary of the oikos. It brings the outer side back into the closed inner side; it brings society back into the organization. Thus, the take-and-place strategy has to realize that the workplace is the most important locus of communication and as such the most important place where organizational control is required. In other words, individuals undermine or bridge every wall by communication. The supposed elements of the working class use work as their favorite joker in the socialist manager’s game—they play a game with this game, working with communication, which can be neither completely appropriated nor perfectly controlled by the totalitarian party—this is the people’s twist.

Individuals, Classes, Masses In the eighteenth century, the term individual was used in a pejorative sense only (cf. also genius, idiot, and proletarian). It indicated a disintegrated man without any respectable social status: in other words a man under suspicion. In the nineteenth century, which framed and provided the background of social movements like socialism and communism, this pejorative term is abstracted and generalized to create a recognizable unit: an element of masses that enters a social status by industrial work only to become an element of class instead of mass. The supposition is that work is the only way for an individual to gain personality. The advantage of this supposition is an almost undetermined notion of personality—a notion which focuses on action, supervision, and process instead of status. Positions can be achieved, but not taken for granted. Everybody can hope to change their inherited ascribed status. The medium of hope and change is work, or better: working. Because an oikos always describes social positions in terms of property rights and duties, it is no surprise that work as a means to gain and keep status is considered as a means only for those who have no such stable positions—that is, for individuals, who are people without property rights and therefore without any commitment and loyalty to the good of society. The notion of working poor for homeless people shows this excellently. Thus, the suspicion of a lack of integrity is an index of individuality (Stanitzek 1989). This can be called the “suspicion index.” The concept of obligation to work and the necessity of political control of labor by the society can already be found in the writings of Thomas More and the Utopians of the sixteenth and seventeenth centuries (Roth 2004, 10). In the eighteenth century, there were many attempts to use work (i.e., physical labor) as an integrative instrument (Foucault 1976) in orphanages, jails, labor camps, and so on. Later, under socialism, physical labor was attributed to be of higher moral and symbolic value than the activities of intellectuals, and industrial work to be of higher value than agricultural work. Being without employment (i.e., having “no work”) was consequently considered to be a criminal state of life, which was to be prosecuted by the police (Niedermüller 2004, 30). These attempts lead to the invention of “organization.” It is the basis of Lenin’s economic program, which was founded on his high esteem of German bureaucracy and American management methods, including cadre politics (Best 2005; Hughes 1991;

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Cross-Cultural Perspectives on Knowledge Management Taylor 1911). Until today and even outside socialism and communism, organization can be seen as a kind of entanglement of work and membership (thus, people normally speak about “employment”). It has remained the horizon of almost all career planning and personnel development. Labor has become generalized to work to indicate that intellectuals and engineers are also employees. Otherwise, work can never be claimed completely and exclusively by an organization; nobody is completely occupied by employment. “To work” is what both included and excluded people can always do to continue their social life or to reproduce their social identity (their personality). Describing ourselves as working indicates our attractiveness as employees, but also indicates our external life, our personal individuality. Thus, the entanglement of organization and work reproduces the suspicion index mentioned previously, because work (not employment) is the joker of the individual within the organization. Work itself bears the suspicion index of individuality. Work itself allows us to evade rigid organizational controls. This is the game that people learned to play so well under socialism. The twentieth century brought an invention with serious consequences: the invention of communication (Shannon 1948). It gave the opportunity for individuals to introduce individuality as a joker in the management and organization game. It enters the social stage as a kind of redescription (Hesse 1966) of the well-established work/organization entanglement: communication occupies work. The problem of individuality, namely the social reckoning with inclusions and exclusions or with integration and disintegration, now lies in the entanglement of decision and communication or, as Luhmann (2000) clearly put it, in the entanglement of organization and society. Communication works as a bridge and as an undermining tunnel as well in formal organizational decisions. It has become a kind of disintegrating joker in integration processes. Problems of integrity have seemingly become problems of flexibility. Problems of planning and leadership became problems of management. Communication is not simply the medium of individuality, but the way in which decision and communication are to be entangled. If management is a sort of leadership, then knowledge management becomes of importance as a communication process, because managers have to reckon with the social, organizational, and individual rationalities. That is why in organizations, everyday communication is presented as work. In socialism small groups established themselves as “informal collectives” at the workplace. They used communication to develop identity and lasting collective friendship, and to distinguish themselves from the “other world” by communicating about interesting topics, which often were not discussed in the public sphere (Jõesalu 2004). Former socialist economies, focusing only on the work/organization entanglement and ignoring the communication/organization difference, had to mobilize all their controlling efforts to make communication become work and to strengthen the decisional aspects to become a kind of confession. But these economies were not isolated from the rest of the world. They were not the whole society and not the only world (even if some of their leaders may have hoped so). Everybody inside the system knew that. Consequently, the more the borderline was shaped as an unbreakable wall, the more traffic went underneath and above. Thus, the rules of masses undermined the rules of classes. The rules of communication undermined the rules of work. The rules of everyday life in the society undermined the rules of organizational control. These undermining

People’s Twist channels, usually described as “private niches,” were the playground for the individuals who loosely coupled, but did not break, the sides of the walls.

Lenin’s Invention of Cadres Vladimir Ilyich Lenin (1870–1924) was a son of the nineteenth century. His model of society was that of a corporation; his model of organization was bureaucracy; his model of order was correctness; and his model of economy was industry. He twisted and entangled all these models to create his own special model of politics: the model of revolution. The management playground for him was in effect a confluence of politics and economy: His notion of revolution is a technical, mechanistic one, which ascribes the obvious difference between politics and economy to bureaucratic organization only and supposedly replaced this difference itself by organization (Selznick 1952). In other words, he found politics and economy to be identical and thus confused them. To manage this, he also identified society and organization as being identical and, thus, confused them too. The result was the new-type party—Lenin’s Communist Party of the Soviet Union—the invention of what sociology calls a “total institution.” Otherwise, Lenin himself certainly knew that a difference remains a difference. A working organization, he thought, would and should reckon with this difference. And certainly he was right; however, a few things were overlooked. On the one hand, there is not only one kind of organizational reasoning and, on the other hand, not only the organization, but also the organized people have their own practices of reasoning. Baecker (2002) demonstrates very lucidly that, because of the forgotten difference, communist parties were forced to turn to conspiracy. In his later years Lenin was also forced to reinvent the state (Lenin 1923). Nevertheless, the main handicap was his understanding of organization as a selecting and separating, distributing, planning, and controlling process (Lenin 1917). However, he overestimated the possible performance of organization. Speed and control were his most sought-after goals (Lenin 1923: 884f.). In this respect, Lenin’s New Economic Policy, starting in 1921, can be seen as an adaptation of Frederick Winslow Taylor’s ideas, because it turned cadre politics into a kind of mechanization of individuals. Taylor replaced the question of organization with the question of efficiency, but he omitted the problem of class struggle—just as Lenin did, when he proposed the transformation of all classes into one mass of individuals, which was considered the substratum for bureaucratic management. Taylor replaced the question of individuality with the question of performance, thus replacing loyalty with payment and bonus and stressing the problem of control—just as Lenin did, although his bonus was social access only (thus, he tried to improve performance by threat). For Taylor a perennial question was whether and how executives and workers can be conciliated—just as it was for Lenin’s cadre politics. Both were inclined to select “first class laborers” as executives (Taylor 1911). Both Taylor and Lenin cultivated connotations of economics, and both interpreted performance to be “a matter of attitude.” Both cultivated a vast range of suspicions concerning possible concurrences between different integrative structures (groups) and both tried to fight against all of these groups. The suspicion was that each kind of integration inside or outside of the organization would negatively influence the individuals’ attitudes to work and, thus produce a “loss of ambition and initiative,” if workmen were “herded

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Cross-Cultural Perspectives on Knowledge Management into gangs” instead of being treated as separate individuals (Taylor 1911, 36). Lenin expressed the same suspicion as emergent lack of loyalty (something he called “correct consciousness”). Both Lenin and Taylor had in common a general suspicion of the proletariat (Conze 1966). Lenin intended to organize the whole country (not a selected firm, like Taylor) in his preferred bureaucratic sense. If something did not work, he reacted with terror (Service 2000), whilst Taylor could simply reduce wages. Lenin coupled an inclusive program with an exclusive strategy. His program was: supervision by the organization (‘the party’ replaced economy and politics), and transformation of people into individuals by decoupling kinship and friendship connections and commitments. This was also the reason for his eagerness to destroy religious structures. Thus, Lenin’s management concept considered people to be unreliable elements: it uses and confirms the pejorative meaning of ‘individual’ as mentioned in the introduction. Additionally, just as Foucault (1976) described it, Lenin expected individuals to be more or less completely controllable, which provided the frame for totally inclusive cadre politics. According to the personal experiences of one of the authors (M.L.), people in socialist economies knew how to ignore these expectations and how to undermine bureaucratic control. The primary principle—a cultural standard—was: ‘Never stick out!’ Yet, on the other hand, their kind of ‘best practice’ confirmed Lenin’s invention of cadres, because their horizon was the same socialist identification of economy and politics. Even in the late 1980s there was no idea of how to live in a society that would not continue this way of organizing, which would not consider economy and politics as being identical and, thus, not conflate them. There was no knowledge about cultural standards in market economy countries. After the collapse of communist power the people’s twist, invented and tested in undermining total institutions under socialism, became meaningless. Their social behavior lost its reference; best practice became worst. Important parts of previous knowledge and related cultural standards became depleted, useless, and out of place. To quote from a personal encounter: M.L.’s teacher at the Burg Giebichenstein School of Arts once told her: “I’ve been a successful professional, now I am more foolish than a dilettante.” The role of people networking was replaced by professional management; but this replacement was not experienced as subversive, but as a very rigid undermining of what was before established as economic rationality itself—the culture of people networking. Thus, the political and economic transformation after 1989 seemed to be destruction and not a reconstruction of economic rationality. The level of people—the ‘flatland’ of culture (Abbott 1992)—seemed to be canceled. Culturally speaking, people lost the ground under their feet. Despite numerous attempts at economic reform of the socialist system it was just this flat level of subversive economic culture, which had been established since Lenin’s invention of planning and cadre politics, which remained until the late 1980s (Luhmann 1995). The term cadre originally indicated a reliable core of armed forces officers, which is necessary for a successful army and thus had to be arranged and developed. It was “a corps of professional soldiers preserved in peacetime as a basis for the wartime army” (Selznick 1952, 18). The notion of a cadre can principally be used to indicate each solid, reliable core of staff or each group of executives or each group of potential leaders. The cadre may refer to a group but may also be used to indicate an individual member of a group. Today in the German language, the term is instead used in sports (e.g., to denote

People’s Twist members of a football team) or a kind of pool from which the members of an occasional team, like a national team, are to be selected. (To our knowledge cadre is not used in this sporting sense in English.) It is certainly no coincidence that socialist states had a special preference for sports and also for the military. Lenin and Stalin understood that these provide a very practical way to individualize people and to form individuals into cadres. To this day this is most successful in very bureaucratic, hierarchical organizations (e.g., French elite schools as resources for public services and economic leaders; see Bourdieu 2004). The concept of forming cadres was extraordinarily successful in the twentieth century, especially in Germany and Russia. It is important to note that cadre describes a precarious status, because it relies on an individualization strategy, which considers people to be unreliable elements. Yet another issue is important in this context: after 1945 the notion of cadre was reintroduced in other languages of socialist countries as if it was of Russian descent (i.e., in the plural form of the word only). The plural form indicates a renunciation of individual-personal attributions, but not of individuality in the abstract sense of a kind of mere element of the mass. Since everyone had been considered to be a member of some cadre as a mere individual, but never as a personality, there are good reasons to assume that the attribution processes referred to hidden groups, networks, or hierarchies and not to individuals. The generalization of the organizational view trivialized and, at the same time, exaggerated the disturbances possibly caused by individuals. Thus, the inclination to hide one’s personality became typical for socialization under communism. One of the most surprising results of this socialization process was an official pride in reliability and a hidden pride in unreliability.

Cadres and Project Makers (Loyalty and Performance) Socialism (Lenin’s notion of “the revolution”) claimed that economy and politics as well as organization and society are identical, and by that confused them in the statemonopolist attempt to control the whole society. This provoked the rule “Do not stick out!” Lü (2000, 100) reports one possible strategy for survival under such circumstances and gives an example: “A prevalent mode of operation among cadres were the ‘three looks and three don’t-speaks’: look for the direction of the wind … , when it is not clear from where the wind is blowing, don’t speak; look at the color of the eyes of supervisors … , when the color is not right (that is, not in the right mood), don’t speak; look for their intentions … , when the intentions of superiors are not clear, don’t speak.” Thus, socialism always tends to present a clean and untroubled surface. But, as much as has been learned from second order cybernetics (Spencer-Brown 1969; von Foerster 1993), underneath there live troublemakers, and they live very well. They are profiting observers (i.e., “parasites of silence”; Serres 1985). In biological organisms, there is normally a symbiosis: Parasites profit from their host, but the host also profits from its parasites. Societies can be described in the same way, and for socialism it would be very lucid. The confusion of economy and politics and the replacement of its differences by bureaucratic organization produce social structures, which focus problems of power and welfare, not of money and credit. Thus it tends to produce political, not economic, information. The effect is a lack of everything and a desire for everything. An economy of more or less trivial exchange is working behind or underneath the official distribution

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Cross-Cultural Perspectives on Knowledge Management channels—and the official side depends on it. Because of that dependence, those who accept the official (surface) rules can be included under a cadre. The invention of a cadre assumes that a life under control is not only possible, but attractive. A good way for an individual to live under these circumstances is to do what is ordered—to do everything correctly, to meet the plan, and so on. The assumption is that, whereas organization produces reliability, individuality produces unreliability. (As noted previously, the same supposition appears in Taylor’s concept of “scientific management.”) This “correct life” can be termed first-order performance according to Heinz von Foerster’s (1993) description of behavior: to present oneself as a “trivial machine,” which transforms every request into an expected output, without any feelings. People who present themselves as reliable workers who do precisely what they have to do, without any doubt or question, make no difference to a planning organization: They seem to be perfect tools, just like organization itself. But they only seem to be so; what individuals really do is to present a suitable identity that hides them from interventions and sanctions. Thus, first-order performance is only the surface of another, more profitable and much more attractive behavior—“second-order performance”—which emerges on the other side of correct life. In Heinz von Foerster’s (1993) description: “a non-trivial machine,” which transforms every input into a possibly unexpected output: a feeling individual, an observing observer, a self-conscious, socialized person, embedded into a complex structure of commitments. Second-order performance depends on networking, and is networking in the exact sense of the word. Georg Stanitzek (1987) described this type of performance outside the sphere of fixed status as “project making,” referring to an essay by Daniel Defoe (published in the late seventeenth century). Whereas firstorder performance profits from a confusion of performance and loyalty, second-order performance profits from a distinction between performance and loyalty. It is a case of decision making, of testing a variable range of opportunities (projects) and of choosing an appropriate project at the actual moment. It is the case of connecting actualities within a network of opportunities. This is the people’s twist, connecting and entangling performance and loyalty. Applying Harrison C. White’s concept of “vacancy chains,” which was originally designed in career research (1970), it can be said then that secondorder performance does not simply fill obvious gaps and empty positions (as first-order performance does) but looks for these gaps and positions and links the identified gaps and positions. It is a managerial game by nonmanagers to undermine cadre politics. It is understood that a network of project-making observers lived underneath the planning and totally controlling socialist surface. These observers were those performers that Lenin’s (and Mao’s, and Ulbricht’s, and Jaruzelki’s …) “new-type party” tried to adopt into their cadres or preferably to transform them into their cadres. The total organization aimed to destroy the economic networks within friendship and kinship structures and the related commitments to get the chance to claim second-order performers by individualization. If it was successful, it could transform them into first order performers, considering performance and loyalty as identical and creating cadres—but cadres under suspicion, because of individuality. Recognizing their suspicious status, these individuals aimed at maintaining their social commitments underneath their organizational loyalty, tried to hide them from observation, and continued to use their networks and commitments to undermine organizational control. Thus, the people’s

People’s Twist twist is switching status between first- and second-order performances (cf. Luhmann 1995 with subtle references to East Germany in the late 1980s).

BEHAVIORAL ATTITUDES IN THE SOCIALIST WORKPLACE This chapter is based on a variety of sources: personal experience, activities, and observation; hundreds of conversations and our own research over more than 25 years; and studying recent research on work in socialism (Roth 2004). Maren Lehmann was an observing participant. She lived in the German Democratic Republic and had to find a way to survive in those times. Gerhard Fink was a participating observer. His research on economics of socialist countries in Europe is well documented in more than 100 publications. Numerous visits to socialist countries, joint conferences, and meeting with many scholars from socialist countries at home and abroad gave ample opportunities to collect detailed insights into the functioning of the system and into the personal histories of hundreds of individuals. To understand the behavioral attitudes in the workplace, it is necessary to consider four aspects of work life: the impact of recurring purges, humiliation, and other forms of degradation; the small work collective as the nucleus of lasting friendships and social relationships; the actual functioning of the planning system; and the quest for efficiency with measures of socialist competition. In socialist political practice, work was recurrently used to degrade or humiliate people who held positions, mostly by initial individualization and sometimes later to integrate them again into a cadre, after they had proven to be reliable. The recurring purges of Stalin, Mao Ze-dong, and others could be considered as necessary consequences of the necessity of a permanent revolution, as Leo Trotsky (1981 [1929], 151) had put it: “The dictatorship of the proletariat, which came to power as leader of the democratic revolution, will unavoidably and necessarily be confronted with tasks, which will be connected with far reaching interferences into the property rights of the bourgeois…. The acquisition of power by the proletariat will not conclude the revolution, but only start it” [Translation by the authors]. In fact, during the great purges or political affairs, people (i.e., holders of positions) must have been profoundly happy not to have been killed or imprisoned in labor camps, but only humiliated. (For selected examples see, e.g., the reports by Paríková 2004.) It is easy to recognize that these personal careers were in line with Lenin’s program: observation by the cadre (the party) transforms all individuals (1) into unreliable elements, and (2) controllable cadres. Thus, while for systems theory the order “Don’t forget to observe!” reminds us of the contingency of any social form, for the Bolshevik party (the communist parties) the same order indicated a battle cry and a threat, as it refers to arbitrariness, not to contingency. ”Don’t forget to observe!” is the task of the cadre in two directions: to check whence the wind is actually blowing and to control the individuals’ loyalty (Lehmann 2003a). Of course, all purges, humiliation, or degradation, which primarily were undertaken to secure the loyalty of individuals to the party line, namely the party leaders, necessarily meant that vast knowledge and capabilities were destroyed. For example, some observers relate the initial successes of the German Army in Russia during World War II to the great purges in the Soviet Army and Navy during 1937–38 (Brockhaus Enzyklopädie 1993;

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Cross-Cultural Perspectives on Knowledge Management Columbia 2005). Given the permanent political threat exercised by the totalitarian state, which could hit anybody in the society, the small work collectives functioned as the nucleus of lasting friendship and social relations, as a sort of retreat (Benovska-Sãbkova 2004). It is necessary to understand that any individual performing a management task had to be loyal against superiors (politicians, top managers) and in order to survive in his position and not to be threatened from below to secure the loyalty of subordinates too. Loyalty cannot be achieved by punishment! The gigantic need for control leads to increasing bureaucratization (personnel administration), with the effect that relief is sought by self-recruitment (i.e., to build up a cadre). This tends to result in a confusion of loyalty and competence, and, consequently, performance emerges as a troublemaker (Lehmann 2003b). The outcome of these processes was that the line between private life and business life (i.e., life at the workplace) was completely blurred. For the bosses, the best way to secure loyalty was to develop friendships with their subordinates. For the subordinates, the best way to avoid risk was to avoid challenging the authority of their superiors (i.e., to demonstrate loyalty and not to criticize), and, thus, to develop friendships with their superiors to permanently implicitly express the required loyalty. In that sense it is no surprise that Aroio (1989, 89), for example, spoke about collectives and addressed the then reform attempts with the words “the labor collectives have become the sovereign managers of the means of production.” The term collective usually referred to small groups and not to the whole factory. These collectives had a common space, a room where they worked together; were jointly responsible for meeting the plan targets; and jointly organized parties or excursions where their families or spouses also participated (Benovska-Sãbkova 2004; Jõesalu 2004). This leads us to follow another line of reasoning, which has to do with the planning system—that is, the actual way in which planning was put into effect (in contrast to what was often believed about planning). The notion of “command economy” is utterly wrong in understanding the functioning of the economic system. In the West this notion primarily served political purposes to illustrate the contrast between ideologies. Although planning ended up in mandatory plan figures (plan targets), it could not be undertaken without loyalty, support, and information provided by subordinates. The Soviet planning system consisted of two huge organizations: GOSPLAN SSSR and GOSSNAB SSSR (Fink 1971). GOSPLAN was in charge of the plan targets as far as outputs were concerned, and GOSSNAB (the material supply organization) was in charge of determining and providing the supplies needed to achieve that planned output. At all organizational levels, there were attempts undertaken to balance the expected planned output and the expected required inputs (Fink and Levcik 1984). This system of balances, the incentives given for plan fulfillment, and the disincentives for not meeting the plan generated the opportunities and the incentives for all participants at the workplace and within firms to behave exactly the same way as the political system had implied: to build up cadres (i.e., circles of loyalty) that did not aim at maximizing output but to secure plan fulfillment by achieving plan targets that were easy to meet. If meeting the plan could not be achieved (e.g., because of insufficient supplies below the planned target) then changes in the plan figures regularly happened. Plan figures were changed quite often, as with a huge number of plan targets there is always inconsistency in the plan (Fink 1971, 85–91, 93), and planners always got what they had planned, but also undesired side effects (Fink 1987).

People’s Twist No single person ever did receive a plan target. It was always the collective, a group of people, a department that was responsible as a whole for meeting the plan targets, which were usually easy to meet. Only those who accepted this ascription and visibly demonstrated that it was accepted could join the cadre or became a cadre themselves. Because this was usually the case, there was a lot of freedom at the workplace. The most important task of those who wanted to keep their freedom was not necessarily to avoid any situation in which they could get the order to accept the ascription of performance to the collective (which constituted a special form of expropriation), but to avoid any situation in which one’s own capabilities were claimed by the collective. The aim was to protect these capabilities for private use in order to accomplish the complex tasks in social life outside the organization. At the workplace individuals were weaving networks with other individuals with special capabilities. The result was a specific form of escapism: the establishment of one’s own niche, relatively (and often delusively) isolated from society and its problems. The primary work team functioned both as a formal group and an informal friendly coalition…. Instrumental friendships, successful transactions, and manipulative actions could be transformed into social capital or into economic resources. Clientelism in the workplace is thus a powerful instrument for reformulating social relations and for changing one’s social status. (Benovska-Sãbkova 2004, 125)

Voluntary confinement within small workgroups offered the following advantages for their members: “saving” on social investment; creating interdependence with others, which was vital for trust building and for achieving additional incomes; and by forming coalitions it also helped the supervisors to exercise control (Benovska-Sãbkova 2004). Of course, this brought to the surface a permanent problem of economic efficiency and performance. There was always the rhetoric of “ambitious plans,” “very tight plans,” “a plan of unprecedented difficulty,” and so on, while plans were met “34 days in advance” and the results may not have been as great as on paper (Golonka-Czajkowska 2004). Because of that, there were more or less permanent attempts to stimulate extra performance, be it with “voluntary” collective work (called “subbotniks” as this work was performed on a normally free day) or with socialist competition, which could also embrace moral targets (e.g., to stop drinking at the workplace) but also to exceed plan targets (e.g. by 1 percent for the whole group) (Popkov 2004). During 1948–53, in particular, various work initiatives attempted to individualize workers and promised premium payments for those who achieved superior performance (e.g., during a work shift in order to unveil productivity reserves). Such initiatives were usually linked to the names of people who were selected to be the model workers in different socialist countries and who at well-rehearsed single work shifts produced many times more then a regular worker in a regular shift: Stakhanov, Korabelnikova, Bykov, Erich Seifert, and others. Toward the end of the 1960s most of these attempts were stopped. Workers had learned that even those who successfully exceeded the work shift targets could not gain much in the long run, since work norms were increased in the medium term. In addition, social pressure was increasing to share the monetary rewards with the collective, which enabled those individuals to exceed the work shift targets (Heumos 2004). The obvious effect was that workers learned to keep their knowledge about plan reserves among themselves, not to talk about their knowledge to their supervisors, and not to tell anybody outside the small collective.

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SUBVERSIVE SURVIVING: KNOWLEDGE MANAGEMENT AT WORK It has been shown that in socialist economies the distinction has been crucial between public and private, as well as in other notions—between position and person, or between firm and family. Management of this difference works with the abstract difference between organization and society. Living in such circumstances, people are always concerned about how to bridge or undermine this particular difference (i.e., how to twist the crucial distinction to establish a niche), which provides the playground for individuality, for creativity, and also for personal honor (Lüdtke 1994, 2002). This twist is at the core issue of subversive survival. The term work was used to refer metaphorically to this playground (or niche) as an indicator, which proved especially fruitful in a society based on an ideological meaning of work. The socialist program assigns political power only to those who work, namely the members of the “working class.” To be acceptable, every internal differentiation must be reinterpreted in terms of work, e.g., the party cadres must be called workers. From “work as everybody’s property” (Engler 1999, quoted by Lüdtke 2002, 39) follows a kind of total inclusion and an increasing inflation of the notion work. However, people used their opportunity to attempt a sort of deflation: they used the term work, too, in order to undermine the socialist version of management. By that new forms of tacit knowledge were created: the knowledge of how to communicate in official party language to transmit private information and how to screen, filter, and employ publicly available explicit knowledge for private use. In that sense, there was tacit-tacit transfer at the workplace among friends, and there was also explicittacit transfer of knowledge made publicly available, but at the workplace there was no tacit-explicit conversion from workers to supervisors, and there was no explicit-explicit transfer from workers to supervisors. The Nonaka/Takeuchi (1995) model did apply, but only very selectively. Knowledge creation for the organization, or the party, did not take place. Very specific cultural standards of communication styles emerged, which are in stark contrast to communication styles in Anglo-Saxon or German-speaking cultures (Fink, Neyer, and Kölling 2007). Subversive surviving by work is based on yet another distinction. When the focus is to be put on the physical, arduous side of work, it can be called labor to emphasize physical production or one could emphasize the creative meaning of intellectual activities and use the term work. The latter was normatively preferred in socialist economies, but by that intelligence and engineering, science and leadership were confused. Thus, the party claimed the intellectual side for their cadre and assigned the arduous side to the people (Zimmermann 1994). The primary effect was a total confusion of labor and work at the ideological level and complete separation at the political level. The secondary effect was that a model like that of Gupta and Govindarajan (2000) could not work within the organization. Those who were politically assigned the right to have the useful knowledge did not have it, and those who did have the knowledge were better advised not to stick out and let the others know that they knew. Communication channels were reduced to tacit knowledge transfer embedded in the official political language, which had a double meaning: a meaning as a vehicle for knowledge transfer only to those who knew the context. Those who knew the context could internalize new tacit knowledge; those who did not know were excluded from the communication channels. A condition

People’s Twist of atmosphere as suggested by Holden (2002) was restricted to the small collective at the workplace, where lasting friendships could be developed. Communication was context dependent and more implicit—between the lines—than explicit. Thus, the Gupta/Govindarajan (2000) model may also be considered to be culture dependent. Both confusion and separation of work and labor were obvious at the workplace where in the primary team everybody could monitor all information in the room. But neither the confusion nor the separation could ever be discussed, because that would have challenged the political ideology. But exactly because of this blind spot of socialism, people outside the cadre could use this as their playground. Thus, the workplace was the place of subversive surviving. Consequently, people who lost their jobs after the end of communist power interpreted this unprecedented experience as the loss of their existence. The first condition of this subversion was that each action and each creation, each production and each invention, and definitively each performance were to be described in terms of labor: It must have been done with someone’s own hands; it must have been arduous and cumbersome. It must have been “objective production.” Consequently, engineers and scientists—who produce under more or less intellectual circumstances— but also those who had leading positions or professions as teachers, physicians, or lawyers found their personal self-consciousness in the private sphere where they “really worked manually.” By that they framed themselves as honorable persons at their workplace (Lüdtke 2002). The second condition of the subversion is that the creative, intellectual aspects of work are to be understood solely as limited professional aspects and—in this shape—must be played down in the light of the ideological understanding of work as everybody’s practice and leadership as the cadre’s practice. In that sense, it was forbidden rather than encouraged to explicitly address the value of knowledge. To follow insights as provided by the Gupta/Govindarajan model (2000) would have been in direct conflict with the ruling ideology. To conclude, the socialist economy itself established a double-sided subversion: labor undermined work, and work undermined labor—both people and professionals undermined the cadre—at the workplace!

DISCUSSION This chapter uses a sociological theoretical approach to highlight a cultural organizational concept of behavioral attitudes at the workplace in socialist economies. This concept is in line with earlier findings about the functioning of the socialist planning system and with more recent research on work in socialism (Roth 2004). Attempts to give those observations a meaning in economics, as Janos Kornai (1975) had put it with his “economics of shortage” are not referred to here. Nor is the financial mirror image of our findings, although the late reform attempts, which were aborted by the collapse of communist power, aimed at putting stronger emphasis and great hopes on applying financial tools in economic planning (Fink and Vacic 1989). Our approach is also in stark contrast to the core issues discussed in the literature on economic transition and on German unification, in particular. Our approach is a badly needed complement to the financial and cost-cutting views predominant since the fall of the Berlin Wall in 1989. However, more efforts are still

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Cross-Cultural Perspectives on Knowledge Management required to reconcile our approach with the financial and cost-cutting view, at least to link the two approaches and to identify commonalities and crucial differences. More research is required to understanding the processes of transition at workplaces, in private life, and in households. Nevertheless, our findings will also hold if the financial side was to be fused with our cultural organizational approach.

SUMMARY In socialist economies, the motivational foundations of knowledge management were not given as stated in the models of Nonaka and Takeuchi (1995), Gupta and Govindarajan (2000), and Glisby and Holden (2002). In an atmosphere of high political pressure, transfer of explicit knowledge was highly risky and, thus, impeded. From the perspective of rulers (political leaders) communication was under permanent suspicion of undermining organizational control. Based on the insights of F. W. Taylor, with whom he shared the suspicion of individuals and the perception that performance was a “matter of attitude,” V. I. Lenin had derived his concept of the totalitarian communist party. By that, Lenin had overestimated the possible performance of organization. He was much concerned about speed, control, and issues of securing loyalty. Because work and communication were entangled, and can never be claimed completely and exclusively by an organization, building cadres (i.e. organizing fully reliable well-performing individuals) was at the core of Lenin’s organizational concept. The implied assumption was that a life under control is not only possible, but also attractive. The best way for an individual to live under these circumstances was to do what is ordered and to hide one’s personality, knowledge, and capabilities. Under such circumstances, passivity of individuals was advised where political risk was to be avoided. Embedded into the collective at the workplace, people were very active about securing survival and developed a self-conscious form of individualism to get the best out of the system: Workers had learned to protect their productive knowledge from being exploited by the rulers. “Never stick out” had become a central behavioral rule, a cultural standard. Individuals aimed at maintaining their social commitments underneath their shown organizational loyalty. Those individuals who were performing a management task had to be loyal against their superiors and had to secure loyalty of subordinates, too, in order to survive in a position and not to be threatened from below. To achieve that, superiors had to recruit their own cadres and to protect their cadres by aiming at easily met plan targets, which were never given to any individual but to the collective. This created interdependence between subordinates and supervisors and helped supervisors to exercise control. Because of that, the line between private life and life at the workplace was completely blurred. For the subordinates, the best way to avoid risk was not to criticize, to develop friendship with their superiors, and to demonstrate loyalty permanently. In the former socialist economies an important rule of the game was this: Loyalty is more important than efficiency. Subordinates were well advised not to challenge the authority of their supervisors. The imperative was to be friends with immediate colleagues and superiors. An atmosphere of trust and lasting instrumental friendship was

People’s Twist to be generated among the primary work team. Therefore, superiors should not demand impossible tasks from their subordinates and take care of the well-being of their subordinates. Implicit advice for everyone included the following: Do not provide information; do not provide knowledge to those who fix the plan targets; enjoy your freedom at the workplace; and integrate your family into your life at the workplace. Under such circumstances, new forms of tacit knowledge transfer emerged: the knowledge of how to communicate in official party language to transmit private information and how to screen, filter, and employ publicly available explicit knowledge for private use. Knowledge creation for the organization or the party did not take place. Loyalty was of importance in the Soviet Union and other socialist economies. Gifts were regularly given to make sure that the supplies, which the plan had assigned to a firm, were forthcoming. This very particular in-group behavior emerged within the imposed culture of fear: Outsiders may have challenged the peace at the workplace, intervened in the group, or endangered private life. This fear was enhanced by the political system that required full loyalty and subordination to the leaders by everybody. We may also understand why Western-style notions of individualization and management by objectives are clearly perceived as command economy by those people who used to work under socialism (i.e., in a socialist planned economy). These are the main reasons why knowledge management “Western style” needs a considerable amount of preparation and learning also by Westerners who want to transfer their “superior” management knowledge. In socialist economies, applying wisdom as provided by extant Western literature on knowledge management would have been fatal for workers and cadres alike.

NOTES 1. The title of our chapter refers to Dirk Baecker’s (2002) notion of “Lenin’s Twist.” We particularly wish to thank Nigel Holden, Nottingham, and David Pauleen for stimulating comments and very helpful advice and support. The usual disclaimer applies. 2. For a more detailed review of the literature on cultural values, cultural standards, and personality traits see Fink, Neyer, and Kölling (2007).

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SECTION 3 Research and Cases on Culture and Knowledge Management

9 Institutional and Cultural Influences on Knowledge Sharing in Russia and China1 Kate Hutchings and Snejina Michailova

ABSTRACT Knowledge sharing within organizations can contribute to competitive advantage; as such understanding what contributes to, and works against, knowledge sharing within subsidiary operations is of vital importance to internationalizing organizations. Where there is great cultural distance between the home nation and the subsidiary operation, as there is between Western industrialized economies and the transition economies of (former) communist nations like Russia and China, there is even more necessity to create a climate conducive to effective knowledge sharing if its potential value for gaining competitive advantage is to be harnessed. The purpose of this chapter is to explore the cultural and institutional factors that impede and facilitate knowledge sharing in Russia and China. The research involved semistructured interviews conducted with Western and local managers in Russia and China over an eight-year period between 1996 and 2003. The chapter adds value to the existing literature in finding that knowledge sharing can occur in Russia and China but within a context of recognizing preexisting in-groups and implicit communications styles and the legacy of communist work practices and a culture of fear.

INTRODUCTION During the past two decades, there has been an unprecedented increase in the number of organizations that have decided to internationalize their operations. The international movement of labor that has been concomitant to such expansion of international business has meant that knowledge management within wholly owned foreign subsidiaries and international joint ventures has become an issue of increasing importance to international managers and management researchers

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Cross-Cultural Perspectives on Knowledge Management alike. Foreign direct investment (FDI) brings with it advanced technologies, marketing skills and easier access to export markets (Soubbotina and Sheram 2000), but it also provides challenges and opportunities in knowledge sharing, a bilateral process in which knowledge is transmitted and received by international managers and local subsidiary employees alike. Where there is a great cultural gulf between the headquarters nation and the subsidiary operation, as there is between Western industrialized economies and the transition economies of (former) communist nations like Russia and China, there is even more necessity to create a climate conducive to effective knowledge sharing if its potential value for gaining competitive advantage is to be harnessed. Knowledge sharing, as opposed to one-way knowledge transfer, has the potential to not only ensure the development of the nation in which FDI occurs but also to facilitate cross-cultural communication that contributes to cross-cultural understanding between the parent and the subsidiary, and ultimately intercultural effectiveness. Where the cultural distance between the multinational corporation’s (MNC’s) nation of origin and the host nation subsidiary is great, there is even greater saliency for there to be efficient knowledge sharing if intercultural effectiveness is to be achieved and the potential value of such knowledge sharing for gaining organizational competitive advantage is to be harnessed. Two such nations where there is a great cultural gap from the Western2 MNCs that have moved into them as foreign direct investors are the transition economies of Russia and China, both of which have taken advantage of the rapid demand for entry by international corporations since the crumbling of communism in the late 1980s, and both of which are of considerable international economic and strategic importance. This chapter explores the cultural and institutional factors that impede and facilitate knowledge sharing in Russia and China. The chapter extends existing literature in finding that, despite prior belief to the contrary, knowledge sharing can occur in Russia and China but outside the context of a Western model of knowledge sharing and teamwork, allowing for the recognition of preexisting in-groups and implicit communications styles and the legacy of communist work practices and a culture of fear. The rationale for examining both Russia and China is to highlight the significance of differing cultural and institutional impacts on knowledge sharing in these transformational societies. Although there is a growing body of literature exploring knowledge management in the developed world, generally, and the transforming economies, specifically, to date there has been little comparison between countries of the impacts of both culture and institutions on knowledge sharing behavior and attitudes. We begin by exploring the literature on the importance of knowledge sharing and current thinking on knowledge sharing in Russia and China. This is followed by a brief description of methodology and examination of why Western approaches to knowledge sharing and teamwork meet with little success in Russia and China. We then explore the specific cultural and institutional impediments to knowledge sharing while providing suggestions as to how Western managers can work with these constraints to facilitate knowledge sharing within their Russian and Chinese subsidiaries. The chapter concludes by suggesting that successful knowledge sharing will be contingent upon adopting a blend of Western and Russian and Chinese practices.

Institutional and Cultural Influences on Knowledge Sharing in Russia and China

LITERATURE REVIEW Research has suggested that international businesses need to transfer distinctive knowledge to foreign subsidiaries and international joint ventures (IJVs) to build competitive advantage and offset some of the disadvantages of operating in alien environments (Kogut and Zander 1992) and to expand the knowledge base of the subsidiary or joint venture operation. Defined as entailing the deliberate intent to increase, renew, share, or improve the use of knowledge represented in structural, human, and social elements of intellectual capital (Seeman et al. 1999, cited in Haggie and Kingston 2003), knowledge management has been asserted as being essential to organizational competitiveness (Drucker et al. 1997; Kogut and Zander 1992). Yet, though intra-organizational knowledge management has become increasingly regarded as imperative to achieving international productivity, an important limitation on the capacity of international organizations to achieve international competitiveness has been problems with crosscultural communication and management and a subsequent failure of many international businesses to harness cross-cultural knowledge sharing and management learning (Hutchings, 2005). Initial research and practice in the field of knowledge management focused on knowledge transfer which entailed international businesses transferring distinctive knowledge to their subsidiaries to build their own competitive advantage as well as to minimize some of the disadvantages of operating in foreign environments (Argote and Ingram 2000). In this one-way process the international partner brings technology and management know-how (Lu and Bjorkman 1997) with the implication that international managers are “senders” and “teachers” of knowledge, whereas locals are “recipients” and “learners” of knowledge (Clark and Geppert 2002). Much less research has been undertaken into the more complex two-way process of knowledge sharing which involves active participation from both international managers and locals (Husted and Michailova 2002b) in providing one’s knowledge to others as well as receiving knowledge from others (Davenport and Prusak 1998). Knowledge transfer generally involves downloading of technical information to local partners in IJVs and has the potential to result in loss of intellectual property from the foreign partner through ‘knowledge leakage’. Importantly, although knowledge sharing has the potential to benefit both partners in an IJV and can contribute to new ways of thinking and understanding, the research that has been undertaken highlights that knowledge sharing does not always result in competitive advantage for an organization. Rather, it has been suggested that, like knowledge transfer, knowledge sharing can be detrimental to an organization in that once knowledge is codified and articulated the organization risks losing information to competitors (Hutchings and Michailova 2004). Moreover, Husted and Michailova (2002a) argue that knowledge is asymmetrically distributed in any organization and that knowledge sharing depends on the willingness of individuals to signal possession of knowledge and share it when requested. Nonaka and Takeuchi (1995) suggest that human knowledge is created and expanded through the social interaction between tacit knowledge and explicit knowledge and advocate that the organization cannot create knowledge on its own; knowledge creation is dependent upon the initiative of individuals and the interaction that takes place within the group.

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Cross-Cultural Knowledge Sharing Within much of the knowledge management literature there has been an assumption that when individuals are forced into groups, cooperation, and teamwork, knowledge sharing would naturally emerge. A more recent body of work has questioned this view in suggesting that knowledge sharing may not occur at all in cross-cultural settings but its effectiveness, where it does occur, depends upon the foreign partner having understanding of a complex range of factors. Glisby and Holden (2003) argue that a universally applicable understanding of knowledge management is not possible and Holden (2002) suggests that commentators create the impression that knowledge management operates in a kind of a vacuum in which diversity is compressed into one giant independent variable. Hutchings and Michailova (2004), Lam (2000), and Sbarcea (2001) concur in emphasizing that knowledge sharing is not as natural as is often presented in the literature and that attitudes to knowledge sharing and knowledge sharing behavior depend on conditions that vary across institutional and cultural environments. May, Puffer, and McCarthy (2005) further argue that international managers should not only be context-sensitive, but also be fully conversant with the cultural and institutional backgrounds of the countries in which they operate as this type of knowledge is not gained overnight. In attempting to address a lack of knowledge of knowledge sharing within crosscultural settings, initial forays have been made into examining cross-cultural knowledge sharing from both cultural and institutional perspectives and there has been strong agreement that knowledge sharing differs markedly across cultures. Weir and Hutchings (2005) point to the need for trust development as a precursor to the sharing of tacit knowledge in the Arab world, and Child and Rodrigues (1996) argue that cultural differences create divisions between international managers and locals in China. Hutchings and Michailova (2004) found that in former communist countries suspicion of outsiders and in-group alliances work against knowledge sharing and Hutchings (2005) proffers that lack of institutional maturity in China also works against knowledge sharing. Clark and Geppert (2002) suggest that management learning in the former communist nations differs significantly from capitalist societies because of different processes and the nature of post-socialist societies in which organizations and managers operate in a state of ambiguity due to political and socio-economic flux.

Knowledge Sharing in Russia and China In Russia, the potential value of knowledge sharing is often defeated by “knowledge sharing hostility” (Michailova and Husted 2003), which may result from (1) the behavior of knowledge transmitters; (2) the behavior of knowledge receivers; or (3) the transmitter’s and receiver’s shared understanding of the content of the knowledge. Specific characteristics of Russians as knowledge transmitters are: lack of incentives for sharing knowledge; a departmental way of thinking and acting; and a fear of admitting mistakes. Furthermore, Russian managers and employees are eager to accumulate knowledge but strongly resist sharing it, and the strong focus on hierarchical status and physical distance are an impediment to knowledge sharing both top-down and bottomup (Michailova and Husted 2003).

Institutional and Cultural Influences on Knowledge Sharing in Russia and China This resistance to knowledge sharing is well illustrated by recent research in which the second author began collecting questionnaire-based survey data on knowledge sharing in a number of Russian organizations. The respondents were required to answer whether, and to what extent, they would agree with, among others, the following two statements: (1) Knowledge is power, and (2) knowledge sharing is power. The majority of Russian respondents believed that (2) was a typo. Many others could not understand at all the very statement “Knowledge sharing is power” because they strongly believed that “knowledge is power.” In China, the nature of the knowledge available for sharing, along with the knowledge owner’s relationship to the potential recipient may interact with the national culture in affecting people’s openness in sharing knowledge (Chow, Deng, and Ho 2000). Indeed, in China, if private knowledge has no potential to damage the sharer’s self-interests, there is no significant difference between U.S. and PRC nationals’ willingness to share. However, when examining knowledge that could potentially damage the sharer’s selfinterests while benefiting the company, Chinese respondents had a significantly higher propensity to share, putting the interests of the collective ahead of their own. Chinese are also significantly less inclined to share information files with other employees who are not considered to be part of their ‘in-group’ (Chow, Deng, and Ho 2000). In most joint ventures in China the foreign partner is motivated by cheap manufacturing costs, a lucrative Chinese domestic market, reduced investment risk, and expertise regarding market conditions. For their part, the joint venture offers the Chinese partner an opportunity to acquire and develop the foreign company’s technology, receipt of foreign capital, and management know-how (Wong et al. 2003). However, for the foreign partner there is the potential for the Chinese partner to expropriate the foreign company’s technical knowledge and to act opportunistically in a competitive fashion (Chalos and O’Connor 2004). While the foreign company begins as the stronger partner because of its technological know-how, this advantage is gradually diminished by the ability of the Chinese partner to learn foreign technology quickly. As Wong and colleagues (2003) argue, when the Chinese partner has exhausted technology transfer possibilities, its unique knowledge of its own culture enables it to move out of the partnership quickly and operate independently, using the proprietary knowledge it has acquired from its former foreign partner. Such potential for knowledge leakage creates real reluctance to engage in knowledge sharing. It has been further proposed that Russians and Chinese actually have a propensity not to share knowledge at all (Elenkov 1998; McCarthy and Puffer 2003; Michailova and Husted 2003; Smith, Peterson, and Wang 1996; Tsang 2002). Our analysis suggests, however, that understanding knowledge sharing in Russia and China is more complicated than has been previously assumed and that knowledge sharing may actually be greater in these locations than in Western cultures if an in-group relationship exists between transmitter and receiver. For Western managers to unlock the key to how to achieve such knowledge sharing in their subsidiaries is central to achieving competitive advantage in nations that are of increasing strategic importance to international business.

METHODS The research referred to in this paper is based on interviews that we have undertaken in Russia and China over the past eight years. The Russian data is based primarily on interviews and informal conversations conducted with 48 Russians and Westerners

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Cross-Cultural Perspectives on Knowledge Management between 1996 and 2002. Some of the organizations were followed closely over a three year period of time and, in those cases, written and video material was used and observations conducted along with the interviews. The Chinese research involved analysis of company reports, informal conversations and semi-structured interviews conducted with almost 100 interviewees including Australian, North American, and European expatriate managers and local Chinese managers between 1999 and 2003. Organizations employing these managers were selected from databases maintained by Western trade and business associations in Russia and China. In both countries, the researchers acquired insider status in a number of companies by virtue of return visits to conduct follow-up research. Such insider status was an advantage in gaining access to organizations as well as in soliciting information from interviewees. The disadvantages were offset, in part, by the inclusion of colleagues who were outsiders to the Russian and Chinese contexts and who, accordingly, lent academic distance to the research projects. The companies in both Russia and China represented a variety of industries and ranged in size from small, owner-operated businesses to large MNCs. The companies included those that have had significant strategic success in their operations in Russia and China as well as those who have committed strategic errors and have lessons to teach other potential investors into Russia and China about the problems and pitfalls inherent in doing business without adequate understanding of, and sensitivity to, local business practice. Multinational companies drawn on for interviews include, but are not limited to, ABB, Accenture, ANZ, BASF, Bechtel, BHP-Billiton, Dow Corning, Great Northern, Hilton, Maersk, Nike, Philips, Radisson, Rockwool, Smith Kline Beecham, and Unilever.3

INSTITUTIONAL AND CULTURAL INFLUENCES ON KNOWLEDGE SHARING As many Western organizations have shifted to flatter organizational structures, they have also altered their management and human resource management practices to fit with a culture of decreased hierarchy, greater participation, devolved decisionmaking, teamwork and multi-tasking. In many cases, such organizations have assumed that when they establish subsidiary operations in transition countries they may also utilize the organizational structures and practices that have proved optimal in their home operations. Concomitant to such assumptions has been the belief that employees in subsidiary operations will also develop an organizational culture in which departments will work well together and will share information and knowledge for the benefit of the organization as a whole. The reality that Western managers have encountered is organizational practices that have erstwhile proved an impediment to knowledge sharing. Transition economies like Russia and China provide Western businesses with employees that have been historically accustomed to very vertical organizations that utilize Taylorist work styles, punishment as deterrence for poor performance rather than rewards and incentives for good performance, and communication and decision-making that is very top-down and follows a strict hierarchical chain of command. A Western expatriate in a Russian construction company pointed out the following: It is amazing how well-defined, strict, and rigid the structures of the traditional Russian companies are. There are so many hierarchical layers. And there is so little transparency. At

Institutional and Cultural Influences on Knowledge Sharing in Russia and China the same time, when it comes to who is allowed to make a decision, suddenly the structure becomes entirely flat—there is only one person in the entire company who is authorized to make decisions, the top boss. Everybody is happy with this situation. Why? Because it is the best way in which the employees can avoid responsibility and the top boss is satisfied in his desire to exercise as much formal power as possible.

A similar view is shared by Russian managers and employees themselves. According to a Russian middle manager in a pharmaceutical company, The CEO is the top figure in each enterprise. This is how it is and nobody can question this fact. We all expect the CEO to have the precise answers to all important questions. He is paid for this and this is his primary responsibility. All the others have to make sure that the decisions are executed. It will be anarchy otherwise.

Certainly Western managers face obstacles in creating an organizational culture in subsidiary operations in which knowledge is shared, but they are not insurmountable obstacles. In essence, to improve intra-organizational knowledge sharing, international managers need to work with preexisting Russian and Chinese cultures and institutions. What Western managers most need to avoid is just attempting to unilaterally force groups to work together. In the West, assigning people to work together often yields naturally emerging cooperation, and self-managing work teams are increasingly utilized. However, such a strategy does not seem to work in the Russian and Chinese contexts. Indeed, forcing out-groups to work with each other can not only lead to conflict between out-groups and in-groups but also to conflict within existing in-groups. Western managers and expatriates can easily be misled by believing that because Russia and China are collectivist countries, teamwork would be self-evident and unproblematic. However, Russian managers and employees do not distinguish the notions of team and collective. They have been working in groups and collectives for decades, but never really in teams and the word team does not have a specific meaning for them. In a number of interviews conducted in Russian companies, our Russian respondents used the term collective in their answers to questions regarding teams and teamwork.

Modus Operandi of Personal Networks and In-Groups Core to the conduct of business in Russia and China is interpersonal relationships that are to a great extent determined by the distinction between in-groups and outgroups. For the Chinese, “having found the basis for friendship one has acquired a good friend whom one believes one can trust and can do business with. However, at this stage the friendship is one on which business deals can be struck. A major development however is that one has moved to bring the former ‘outsider’ into one’s close network of ‘“insider’ friends” (Buttery and Wong 1999, 152). For Russians, a struggle for domination within a group is the most natural thing in the world, and the essence of human relations. Therefore, “building a circle of intimate friends is extremely important in securing one’s dominant position within a group … for the group to act together coherently … there needs to be an equal distribution of both hardship and pleasure so conditions can improve for the whole group” (Mikheyev 1987, 504). Although recent findings suggest that as transitional economies become more competitive, the networks and connections will no longer seem as important as before (Guthrie 1998; Wright, Szeto, and

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Cross-Cultural Perspectives on Knowledge Management Cheng 2002), we would argue that personal connections remain essential to creating a climate of knowledge sharing. Key to Western managers achieving knowledge sharing in Russia and China is accepting the existence of a culture of insider status and recognizing that networks, (see Ledeneva 1998; Michailova and Worm 2003; Puffer and McCarthy 1995 and Guthrie 1998; Luo 1997; Wright, Szeto, and Cheng 2002) being based largely on collectivist relationships, involve very frequent exchanges, and operate at both workplace and private levels. Our interview data confirms that Chinese and Russians prefer working and perform best in in-groups. Therefore relationship building must occur before business is transacted and before knowledge sharing can occur. Relationship building takes a long-term orientation because it is integrally tied to the development of trust and shared context. As a European expatriate explained, Once you are family/friends, they (the Chinese) want to do deals to help you out. The Chinese culture is one of giving the world to family/friends—but if they do not know you, you are worthless. Perhaps there is less balance in the Chinese culture from a Westerner’s perspective (European manager, construction company).

Similarly, a Russian top manager in a Russian-Danish joint venture in the telecommunications industry commented, Westerners come and go. They usually stay for two, three years. Exactly after we have had some time to test them and made up our minds whether they are trustworthy or not, they leave. This is a pity. Two to three years are not a sufficient period to establish a good personal relationship. When the next Westerner comes, I simply decide that it is not worth investing the energy and the effort in a new friendship.

An important distinction between Western and Russian/Chinese practice is that for the Westerners the ends can often justify the means but for the Russians/Chinese the means is more important than the ends. Indeed, the inclination not to share knowledge with outsiders means that the only way in which one is able to access information from an outsider is to work toward the ascription of insider status or work through intermediaries who already possess insider status. As an Australian expatriate explained it, You need to employ people with connections to be your advisors—they can mediate for you. They can tell you what to do. But be selective. These people can turn out to be charlatans. This can be a massive liability if these people get out of favor—you need to check their political background (Australian manager, trading company).

The importance of in-groups in Russia and China also means that employees tend to focus on departments rather than an organization as a whole. Historically in both Russia and China, various corporate departments within state-owned enterprises (SOEs) have been linked to a large number of government constituencies which implies that companies have depended heavily on higher authorities for their operations. As most of the SOEs performed poorly financially they had to secure bank loans through government intervention. Moreover, within organizations there has been a high level of dependency on superiors, who are responsible for defining the tasks and assessing the performance of their subordinates. These factors have meant that subunits in Russian and Chinese organizations have depended on relevant government agencies more than on their own organization, and employees have directed their loyalty to their immediate superior rather than to the organization as a whole.

Institutional and Cultural Influences on Knowledge Sharing in Russia and China Russians and Chinese know a lot about their in-groups but are reluctant to provide information to somebody that they consider to belong to an out-group. Traditions of secrecy were perpetuated during the communist regime. In Russia, larger groups were imposed as merely structural configurations for executing work. It was within the immediate in-groups where people knew each other, could trust each other, and consequently, shared information and knowledge with each other. This sense of identification and belonging to the in-group, combined with hostility to out-group members, even from the same organization, created a feeling of security that was, and still is, highly valued in Russia. The following suggestions explain how Western managers can work with in-groups: •

• • •

•

•

As a Westerner, be prepared to be perceived as an outsider to the already established ingroups in the Russian and Chinese organizations. Accept that relationship building in Russia and China is a lengthy process and utilize intermediaries (local Russian/Chinese or established Westerners) in the short to medium term while working at building your own relationships in the long term. Build networks with departmental managers to increase interaction across departments. Do not destroy existing relationships among people in the organization. When implementing “Western” management practices in JVs, ascertain the existing in-group relationships and work with these existing groups rather than attempting to impose new teams. Also, remember that teamwork is only considered in “emergency situations”, not as a way of organizing work in general. Recognize that creating new teams can be done but it takes time to build an organizational culture that broadens its perception of who is included in an in-group—patience and flexibility are key. Develop a strategy in which in-group team members’ shared characteristics (such as a group goal) become more salient than the characteristics that differentiate them from out-groups.

Emotional Trust and Implicit Communication Intrinsically tied to the existence of in-groups in Russia and China is the notion of trust. The decision to trust a person and share knowledge with them depends upon having knowledge of that individual. Hence, for Western managers to facilitate knowledge sharing amongst their employees and across departments in Russia and China necessitates establishing a relationship that is built on strong trust. In both Russia and China emotional trust is a prerequisite for establishing cognitive trust (Michailova and Worm 2003). As already mentioned, Russian and Chinese people feel frustrated that foreign managers may only stay in their companies for a short period of time, which prevents them from engaging in multiple and long-term projects which would offer the opportunity of establishing good personal relationships. The subsequent effect is that these Western managers are not able to build trust and hence have greater difficulty in creating a culture of knowledge sharing within their subsidiary operations. An Australian expatriate characterized the situation thus: The Chinese talk about this trust thing and I think it is one of those things that I have found very hard. It is different according to who you speak to. Basically when we start we have no trust and we have just met and let’s do this deal first and then we can start talking about

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Cross-Cultural Perspectives on Knowledge Management trust because then we will understand each other. Hence, the Chinese joint ventures having this opening paragraph abut mutual understanding … It is just really important to them (Australian manager, finance company).

Furthermore, in cultures such as Russia’s and China’s, implicit communication styles are used—meanings are either conveyed by physical context or internalized in person and little information is provided in the coded, explicit, transmitted part of the message (Hall 1977; Hall and Hall 1990). As individuals already know much about each other by the time a relationship is formed and insider status ascribed, they do not need to disclose so much information in normal transactions—much knowledge is tacit. Indeed, the existence of tacit knowledge makes it very difficult for Westerners to move from outsider status. Consequently, it takes a long time to move into a situation of knowledge sharing because it depends upon tacit knowledge already existing. Although the richer the communication experience, the more effective the knowledge sharing, it will only occur where trust and in-group status is already established. One U.S. expatriate noted that communication is the greatest difficulty of all. As he said, You need to take Chinese and turn it into Chinese English. The words that come out of my mouth—they hear it differently and the words that come out of their mouths I hear them differently … They already have an understanding of what they are saying amongst themselves, and we (Westerners) are not really tuned into this (U.S. manager, hospitality company).

Commenting on the communication style of Western owners, a Russian middle manager in a construction company pointed out: Our Western manager believes he is very efficient by inviting us to a meeting through a message sent by e-mail. This is very impersonal. If he respects us, he should simply tell us personally about the meeting—the administration is on two floors, it will take him ten minutes to walk through the offices. Then he is wondering why only half of us went to the meeting.

The following suggestions explain how Western managers can create a climate of trust using implicit messages: • • •

•

Accept that trust needs to be developed and tacit knowledge held before the occurrence of knowledge sharing. Utilize intermediaries to interpret implicit communications and reduce the risk of confrontation by minimizing the directness of conveying your messages. Invest in understanding the context of the setting you work in—knowing the context will reduce the ambiguity of interpreting the less explicit style of communicating adopted by Russians and Chinese. Work toward showing respect to Chinese and Russian counterparts through more personalized communication styles.

Group-Based Incentives and Rewards The Chinese culture is one that values thrift and both the Chinese and Russian cultures value perseverance. Yet, the Communist era created societies in which there was no real incentive for sharing knowledge across the organization. The group focus meant that individuals have been conditioned to evade responsibility (Worm 1997).

Institutional and Cultural Influences on Knowledge Sharing in Russia and China Indeed, organizational cultures developed (and continue to exist) in which individuals view themselves as part of a department rather than an organization. Their department became their work in-group and there has been indifference or even hostility toward the out-group (other departments). This division between groups and departments can also translate into problems in creating a sense of loyalty across an organization. As an Australian expatriate noted, Chinese are not loyal to the organization. It is hard to get them to feel that sense of organizational commitment. They will leave you for 1 RMB [approximately U.S. 10 cents] (Australian manager, trading company).

A Russian head of department in a telephone card company explained that, My task is to make sure that my department is better than the others. We are fighting for resources and recognition internally in the organization. It is very competitive, you see … I don’t really care about the company as such—this is not my responsibility. My responsibility is my department.

Where rewards and incentives are introduced by Western organizations, there are difficulties faced in their implementation. Chinese will be inclined to give greater reward allocation to, and be “softer” in assessments of, in-group members than out-group members (Hui, Triandis, and Yee 1991; Leung and Bond 1984), and as such it will prove difficult for Western organizations to utilize peer assessment of performance in their subsidiary operations. Moreover, in a collectivist culture it will be harder for in-group members to give and receive negative feedback from each other, a situation that works against sharing knowledge across groups. Feedback in Russian organizations is mainly given in negative terms (e.g., when the boss realizes there has been a deviation from the defined standards and procedures, no matter how outdated and rigid these standards). In such a context, hiding mistakes is a well-justified and rational behavior although it may cause chronic problems and financial losses from an organizational viewpoint (Michailova and Husted 2003). During the communist era both Russians and Chinese were trained not to admit mistakes. This reflects not having a Western orientation which views mistakes as learning opportunities. The corresponding absence of feedback and opportunity to reflect has contributed to an unwillingness to share learning experiences and knowledge of how to avoid repeating mistakes. Russian and Chinese executives are generally reluctant to believe that knowledge can be acquired bottom-up in organizations and have difficulties accepting that they can learn from employees from lower levels (Michailova and Husted 2003). Subordinates often intentionally hoard their knowledge, anticipating that their superiors would not promote them if they demonstrate in public that they are more knowledgeable than their superiors. Although the lack of rewards and incentives for sharing knowledge tends to work against employees showing initiative, the cultural traditions also reinforce the lack of institutional incentives for this. That is, the strong hierarchical and authoritarian traditions within organizations mean that managers are threatened by participatory styles of management and employees do not want to involve themselves in decision-making for fear of having their views rejected (Chen, Peng, and Saparito 2002). Also, in the case of China, for an employee to provide a suggestion to their senior manager would cause considerable loss of face for both parties.

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Cross-Cultural Perspectives on Knowledge Management The manager looks inadequate and is disgraced for not having first thought of the proposal and the employee is humiliated for shaming their superior. The large power distance between managers and employees is further exacerbated when the people involved are Western managers and Russian/Chinese employees as in these instances an even bigger gap exists based upon an historical lack of networks and trust. Such distance enhances the ingroup/out-group divisions which affect knowledge sharing and organizational learning. Although Western reward systems are quickly being adopted in Russia and China as the number of alliances with Western partners increases, traditions of formality, hierarchy, and command are much slower to change. Moreover, it has been suggested that unethical behavior continues to be tolerated in organizations in China because employees will not share information of superiors’ indiscretions (Jackson and Bak 1998). Such systemic conditions suggest disincentives to share knowledge. Indeed, in withholding knowledge from members of the out-group, the in-group helps preserve its own stability. Maintaining stability and security is highly valued in the Russian and Chinese societal and organizational context (Ralston et al. 1997) and uncertainty can be a major de-motivator. The following suggestions show how Western managers can create rewards and incentives that work with national cultural conventions: •

• •

•

• •

• •

Performance appraisals and compensation should be given to a group as a whole. However, disciplinary action should be done in private so as not to cause loss of face to an individual and to their in-group. Appreciating the value of consensus and giving face to in-groups will create a culture of knowledge sharing built on a foundation of trust. Recognize preexisting groups by using in-group team rewards that preserve anonymity but have disciplinary action carried out by out-group members. Offer incentives to all groups rather than providing incentives that only reward individuals. This will recognize the fact that individuals will not share knowledge unless the whole group benefits from doing so. Recognize that motivational techniques used at home might not transfer to Russia and China. Use collective norms to encourage knowledge sharing and teach the importance of a specific organizational, rather than departmental, mission. Bear in mind that Russians and Chinese value stability, security, and harmony. Recognize that Russians and Chinese will be reluctant to admit mistakes. In order not to expose themselves to being forced to admit mistakes made, they will be very selective in terms of what they share with their superiors. Be prepared for situations where you will hear only what your Russian and Chinese subordinates believe you should hear, not what the reality is. Work slowly toward creating an environment that views mistakes as opportunities to learn and advance. Be aware that the notion of feedback has negative connotations for Russian and Chinese employees. Therefore, they will try to avoid situations of receiving feedback. Incorporate Russian and Chinese organizational norms about work behavior into socialization processes in order to decrease turnover and increase worker satisfaction and performance, and by consequence, increase the propensity of employees to share knowledge organization-wide.

The Culture of Fear In addition to the cultural factors that may inhibit Russians’ and Chinese’s propensity to share knowledge is the culture of fear that continues as a legacy of the communist era

Institutional and Cultural Influences on Knowledge Sharing in Russia and China in which Russians and Chinese were not only given no incentives to share knowledge but were actually encouraged to report to authorities the misdemeanors of others. As one expatriate noted, One of the greatest difficulties is in getting the Chinese to open up to you. They fear government, they fear authority, they fear Westerners. And this makes our communication very difficult (Australian manager, law company).

A Western expatriate in Russia pointed out, We assume they (the Russians) will share information. However, until not long ago, they were punished for sharing information. Why should they suddenly change behavior? It is deeply ingrained in them that it is much more safe to be silent and only share very carefully and very selectively.

China’s and Russia’s shift from centrally planned to market economies and their subsequent adoption of a number of Western accounting practices standards and legal regulations, has led many Chinese and Russian managers to argue for reliance on the rule of law (Wright, Szeto, and Cheng 2002). Yet, in both China and Russia even those who want to stay within the law may find it difficult to do so since by observing one law they may be breaking another one. In Russia, the loopholes in existing legislation ill define the boundaries of legality, encouraging citizens and enterprises to find ways around problems (Bruno 1997). These legal loopholes mean that interpersonal connections are still the way through which many Chinese and Russians achieve their business ends, and many others are discouraged from sharing knowledge in case it should find them in trouble with authorities even though they may not be breaking an official law or regulation. The culture of fear has existed not only in relation to what has been loosely termed by successive Russian and Chinese governments as political “secrets,” but also within organizations in that employees who made mistakes were punished (Scarborough 1998). There have been suggestions that this culture of fear may begin to alter in China with the changes flowing through since its ascension to the WTO. However, an Australian expatriate interviewee notes that the WTO deals mainly with country to country relations and access to markets. It (the WTO) was never an overnight panacea. It was just another signboard on the way to China getting from time zero to 21st century, whenever they got there. It is just another stepping stone … another piece of administration to keep those steps moving forward. But the culture of fear will also move slowly. (Australian manager, finance company)

Western managers need to understand that Russians’ and Chinese fear of sharing information is well-grounded: • •

Recognize that many Russian and Chinese are simply too fearful to share knowledge because of the belief (real or otherwise) that they will be punished by doing so. Overcome this inbuilt tendency (and create an organizational culture that values knowledge sharing) by working toward establishing a high level of trust so individuals and groups will feel ‘safe’ in their discussions with others.

Institutionalized Bribery and Corruption The widespread corruption and thriving black economies in Russia and China also have implications for knowledge sharing in that any knowledge can be acquired for a

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Cross-Cultural Perspectives on Knowledge Management price so long as one has the necessary resources and insider contacts. Such a situation can cause difficulties for Western organizations in trying to reconcile the pressure to engage in such practices whilst also attempting to stay within the confines of Western organizational ethics. The use of bribery is universally condemned, particularly now that there has been the introduction of laws specifically dealing with corruption, and the government has made a point of executing thousands to make the point that it is serious about cracking down on corruption. Yet, although giving cash is usually viewed as buying someone’s services and hence is condemned, gift giving is universal (Yang 2002). The difference between what is an acceptable gift and what is an improper bribe depends on arbitrary, delicately poised cultural conventions that vary according to the situation (Luo 1997), and are often difficult to distinguish. Yet, whereas some practices are increasingly viewed as backdoor (Guthrie 1998), many other historical conventions remain de rigueur. Indeed, as one Australian expatriate notes of operating within China, I do not condone this system, but what can be done about it? The corruption is the result of the political system and institutionalized practices. In terms of regular favors there is nothing different from Australia or the United States. Reasonable expense accounts are reasonable. As an MNC we are rigid, though—we will not engage in corruption—it is against our ethics and it would be foolish anyway given the ability to be prosecuted under the Bribery of Foreign Officials Act (Australia). We have lost large amounts because of this position we take. (Australian manager, manufacturing company)

In Russia, gaining introduction to useful people remains extremely important. In cases when people have no resources to blat, people will resort to bribes. Bribery, corruption, and the criminal ‘second’ society are all part of the criminal legacy of the “economy of favors” in Russia (Ledeneva 1998). This has important implications for knowledge sharing in general (and for the knowledge sharing between organizational sub-groups of Western managers and locals) in that it remains very difficult to develop and maintain good business relationships without engaging in some degree of favors, and knowledge sharing depends upon maintaining relationships through favors. Beyond that, though, despite anti-bribery laws, paying bribes is still an effective way of ensuring access to knowledge as well as preventing knowledge from being shared. Western managers should understand that favors are institutionally entrenched, and should do the following: • •

Convince headquarters that larger than usual expense accounts are required to build relationships and trust that contribute to knowledge sharing. Create an organizational culture that rewards knowledge sharing.

CONCLUSIONS As indicated throughout there are key cultural and institutional influences on attitudes to, and behavior toward, knowledge sharing in Russia and China and these influences have implications for international businesses that have, or are considering establishing, operations in these transition economies. Most notably international business managers need to recognize the importance of devoting time to building networks and trust and developing implicit communication prior to an expectation of knowledge

Institutional and Cultural Influences on Knowledge Sharing in Russia and China sharing occurring. International business managers will also need to be cognizant of the fact that Russian and Chinese workers have been institutionally and culturally trained not to deviate from the norm and to acquiesce to authority and accordingly management functions should be performed within the context of existing networks. Moreover, international business managers should realize that it is important to build organizational cultures that build trust slowly in recognition of Russia’s and China’s lawlessness and culture of fear. Furthermore, it is important to recognize differences in terms of how managers and employees behave in different countries. Understanding these differences is especially important in the MNC context since they are more pronounced among foreign employees within the same MNC than employees working for organizations in their home countries. May, Puffer, and McCarthy (2005) argue that for the delivery of management know-how (and we would argue, knowledge sharing also) to non-Western countries it is of paramount importance to (1) develop a given set of tools for a specific subset of people of the national culture, and (2) to be able to transfer these tools to preidentified people who are equipped with the requisite personality traits. Western managers also need to be aware that despite rapid developments in Russia and China, disparate educational levels as well as vast regional differences remain and have implications for the propensity of Russians and Chinese to share knowledge. People that live in the large, industrialized cities may well be familiar with Western management concepts and organizational practices and will adapt quite readily to a culture of knowledge sharing across individual departments and organizations. However, those that live in more remote areas will be inexperienced or even ignorant of international concepts of accounting, taxation, and law (Cui and Liu 2000; Speece and Kawahara 1995; Zapalaska and Edwards 2001) and management and will be much more reluctant to share knowledge. Indeed, in China a large portion of the population in smaller cities may never have seen a living non-Chinese person (Littrell 2002). Indeed, one of the key factors inhibiting China’s economic development has been the primary focus on industrialization rather than education and the subsequent neglect of professional and managerial skills. We argue that rather than attempting to completely alter Russian and Chinese organizational structures and culture within a very short timeframe, Western managers need to accept a marrying of Western and Eastern concepts in which knowledge might be shared. The fundamental attribution error (Ross 1977) (i.e., the tendency to attribute one’s own behavior to the situation but others’ behavior to their “character”) needs to be avoided by both Westerners and Russians/Chinese. People tend to attribute negative behavior of foreign colleagues to their nationality or culture rather than to situational or contextual factors that operate behind the scenes (Jones and Nisbett 1977) and this is often the case in cross-cultural organizational settings where the national cultures have a large distance between them. Western managers cannot expect knowledge sharing to occur in the same manner in which it occurs in Western organizations, and therefore, the only way in which a culture of knowledge sharing may be engendered is through working within Russian and Chinese cultural and institutional norms. To this end we maintain that knowledge cannot just flow from sender to receiver but must be reconstituted and recreated (Berell, Wrathall, and Wright 2001; Newell 1999) through the development of a third culture (Hui and

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Cross-Cultural Perspectives on Knowledge Management Graen 1997) or an organizational culture that is a blend of Western corporate practice and host nation cultural and institutional conventions.

NOTES 1. Aspects of the research have appeared in the Journal of Knowledge Management and are included in a submission to the International Journal of Emerging Markets. 2. It should be noted that the term Western is used herein to refer to advanced, industrialized nations. To refer to Western or Eastern entails some degree of oversimplification. The term East has been used to refer to the great diversity of nations throughout Asia and the Indian subcontinent as well as to former Communist nations in central and eastern Europe. The West also constitutes a mosaic of cultural and economic diversity, ranging from the European Social Market model to those that may be classified under the liberal, capitalist market banner favored in Western Europe, Britain, Australia, New Zealand, and North America. 3. For a fuller description of the methodology used in this study, see Hutchings, K., and Michailova, S. 2006. Impacts of culture and institutions on knowledge sharing in Russia and China. International Journal of Emerging Markets, 1(1): 21–34.

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Cross-Cultural Perspectives on Knowledge Management McCarthy, D. J. and S. M. Puffer 2003. Corporate governance in Russia: A framework for analysis. Journal of World Business 38 (4): 284–98. Michailova, S. and K. Husted 2003. Knowledge-sharing hostility in Russian firms. California Management Review 45 (3): 59–77. Michailova, S. and V. Worm 2003. Personal networking in Russia and China: Blat and guanxi. European Management Journal 21 (4): 509–19. Mikheyev, D. 1987. The Soviet mentality. Political Psychology 8 (4): 491–523. Newell, S. 1999. The transfer of management knowledge to China: Building learning communities rather than translating western textbook? Education and Training 41 (6/7): 286–94. Nonaka, I., and H. Takeuchi 1995. The knowledge creating company. Oxford: Oxford University Press. Puffer, S. M., and D. McCarthy 1995. Finding the common ground in Russian and American business ethics. California Management Review 37 (2): 29–46. Ralston, D. A., D. H. Holt, R. H. Terpstra, and K. C. Yu 1997. The impact of national culture and economic ideology on managerial work values: A study of the United States, Russia, Japan, and China. Journal of International Business Studies 1: 177–207. Ross, L. 1977. The intuitive psychologist and his shortcomings: Distortions in the attribution process. In Advances in experimental social psychology, Vol. 10, ed. L. Berkowits, 173–220. New York: Academic Press. Sbarcea, K. 2001. The mystery of knowledge management. New Zealand Management 48 (10): 33–39. Scarborough, J. 1998. The origins of cultural differences and their impact on management. Westport, CT: Quorum Books. Seemann, P., De Long, D., Stucky, S., and Guthrie E. 1999. Building intangible assets: A strategic framework for investing in intellectual capital. Second International Conference on the Practical Applications of Knowledge Management (PAKeM99). Smith, P. B., M. F. Peterson, and P. Wang 1996. The manager as mediator of alternative meanings: A pilot study from China, the USA and UK. Journal of International Business Studies 27 (1): 115–29. Soubbotina, T. P., and K. A. Sheram 2000. Beyond economic growth: meeting the challenges of global development. Washington, DC: The World Bank. Speece, M. W., and Y. Kawahara 1995. Transportation in China in the 1990s. International Journal of Physical Distribution and Logistics Management 25 (8): 53–71. Tsang, E. W. K. 2002. Acquiring knowledge by foreign partners from international joint ventures in a transition economy: Learning-by-doing and learning myopia. Strategic Management Journal 23: 835–54. Weir, D., and K. Hutchings (2005). Cultural embeddedness and textual constraints: Knowledge sharing in Chinese and Arab cultures. Knowledge and Process Management 12 (2): 89–98. Wong, Y-Y., T. E. Maher, J. D. Nicholson, and A. F. Bai 2003. Organizational learning and the risk of technology transfers in China. Management Research News 26 (12): 1–11. Worm, V. 1997. Vikings and Mandarins. Copenhagen: Handelshøyskolens Forlag. Wright, P. C., W. F. Szeto, and L. T. W. Cheng 2002. Guanxi and professional conduct in China: a management development perspective. International Journal of Human Resource Management 13 (1): 156–82. Yang, M. M. 2002. Rebuttal: The resilience of Guanxi and its new deployments: A critique of some new Guanxi scholarship. The China Quarterly 170: 459–76. Zapalaska, A.M. and W. Edwards 2001. Chinese entrepreneurship in a cultural and economic perspective. Journal of Small Business Management 39 (3): 286–92.

10 Asian Organizations Meet North American Management Theory: The Case of Singapore and Senge Kala S. Retna and Jane E. Bryson

ABSTRACT This chapter reviews the connection between knowledge management and the learning organization, argues that both concepts rely on culturally embedded theories and practices, and presents a case study of the use of Senge’s learning organization concepts in one large Singaporean organization. The analysis of this case reveals the cultural challenges that emerged in the process of applying essentially Euro-American management theories within an Asian culture. We find, for example, that Singaporean respect for power, status, and order may affect Western-based organizational knowledge management implementation strategies. In conclusion we discuss the practical implications of these cross-cultural challenges for Singaporean organizations, multinational organizations, and for transnational consulting, including the choice knowledge management practitioners have between “best practice” versus “best fit” approaches to implementation.

KNOWLEDGE MANAGEMENT AND THE LEARNING ORGANIZATION

From Knowledge to Knowledge Management For centuries successive minds have pondered over the nature of knowledge and knowing. In the past 50 years of Western thought, management and organization studies have grown as academic disciplines, as has the body of professional managers working within an economic framework that favors competition. Hence as soon as something is recognized as having some potential value or contribution to competitive advantage, it then becomes seen as a resource of the organization to be exploited—suddenly it becomes

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Cross-Cultural Perspectives on Knowledge Management something that needs to be managed and owned. For example, staff became regarded as human resources to be managed through human resource management policies and practices; the performance of staff and the organization is also something to be managed through performance management systems; even the image, reputation, or brand of the organization has become something, which is managed through brand management strategies. By appending the word management to a concept we are changing that concept—focusing it, more often than not, in an organizational context, to serve the ends of the manager. In the case of knowledge, knowledge management is the means, whereas competitive advantage and achievement of business goals are the ends. There has been an explosion of literature on knowledge management over the past decade, remarkable for its blend of practitioner and academic input and appeal. The literature now reports two distinct generations of approach to knowledge management, and purports to be entering a third generation (Firestone and McElroy 2003; Gorelick and Tantawy-Monsou 2005; Metaxiotis, Ergazakis, and Psarras 2005; Scholl et al. 2004). Initial explorations of the knowledge management concept (the first generation) took a technological focus. In these works knowledge management is defined as a technical issue to be managed by developing intranets and other information technology (IT) facilities through which organizational members can capture, share, store, and retrieve data and information. More recent discussions recognized the increasing importance of knowledge to competitive advantage in organizations, and that knowledge management has at its core a social dimension. Decades after sociologists and psychologists have revealed a social construction perspective (Berger and Luckmann 1967; Piaget 1972), the knowledge management literature concludes that knowledge is socially constructed among communities of workers (Alavi and Leidner 2001; Lang 2001). Thus the second generation of discourse has centered on the social and behavioral dimensions of knowledge management. This has drawn attention to individual and group behavior in knowledge sharing and creation. It broadened the focus from the information technology and information management architecture needed to manage knowledge, to the organizational and behavioral change required to achieve knowledge management. This placed human resource management and organization development as a central part of the solution alongside IT. In particular it picked up on organizational learning and the learning organization concept, as a tool for knowledge management systems. As Carter and Scarbrough (2001, 220) point out “for many writers the intersection between knowledge management and human resource management rests largely in the creation or management of learning processes. Human resource management is especially concerned with learning at the level of both the organization and the community”. The ‘generational’ development of approaches to knowledge management in the literature reflects (a) the gradual integration of different disciplinary perspectives (from IT to behavioral science), and associated with that (b) changing perspectives on the nature of knowledge and thus its management in an organizational setting (Alavi and Leidner 2001). Recently, it is claimed that third generation approaches to knowledge management are emerging (for example, Metaxiotis, Ergazakis, and Psarras2005; Scholl et al. 2004). These approaches expand on both the first and second generation by attending to issues of IT and the social/behavioral dimension, through integration with business strategies and goals. As a consequence more serious attention has fallen on the impact and contribution of organization culture to knowledge management.

Asian Organizations Meet North American Management Theory

From Learning to Learning Organization Traditionally the concept of learning has been applied to individuals—learners—in different settings (for example, school or work). In recent decades, much like knowledge has become managed, learning has become organizational. This has changed the focus of learning from a mechanism for achieving individual aspirations and well being, to a mechanism for contributing to competitive advantage and organizational goals. But more than this, the organization not only facilitates learning, it is also a learner. The concept of organizational learning focuses on the ability of individuals and organizations to learn continuously. Its intellectual roots lie in the organizational development literature (e.g., Argyris 1990; Argyris and Schon 1978; French and Bell 1973). But, arguably, its most publicized exponent is Senge. He took the concept, blended it with other concepts (such as systems dynamics) and created a management tool. This tool, the learning organization, is a set of principles and associated techniques to be applied in the management of organizations. He defined a learning organization as an “organization where people continually expand their capacity to create the results they truly desire, where new expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together” (Senge 1990, 14). This organizational utopia is achieved through practicing the “five disciplines” of personal mastery, mental models, shared vision, team learning, and systems thinking. According to Senge the practice of these will enable organizations to truly learn because they are the necessary elements of innovation in human behavior. However the learning organization, and in particular Senge’s recipe for it, is not without critics. For instance, the assumed mutuality of purpose and outcome of learning activity for individual and organization has been questioned (Fenwick 1998; Thomson et al. 2001) as has the absence of the emotional dimension of learning (Ikehara 1999). The usefulness of the concept has also been criticized for lack of clarity on how organizations can achieve it (Kilman 1996), and for ignoring issues of power and politics (Coopey 1995).

The Cultural Gap The learning organization offers a tempting formula for those in pursuit of better knowledge management in their organization. Both are concerned with the collective entity that is the organization, and with the attainment of knowledge at an individual, group and organizational level to contribute to the goals of the organization (Vera and Crossan 2003). The learning organization is an instrument for connecting learning and knowledge, and for understanding how knowledge is regarded, used, and shared in organizations (Scarbrough and Swan 2003). And, importantly, it aims to change the organization culture in support of learning and knowledge (De Long and Fahey 2000; Holden 2002). However, for knowledge management and the learning organization, their combined strength of focus on the organization, its culture, and practices, may also be their combined weakness in some contexts. If, as we accept, knowledge is socially constructed, then it is embedded not only in organizational culture but also in national culture. That is, the culture in which individuals grow up or live their adult lives and in which they

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Cross-Cultural Perspectives on Knowledge Management forge their personal values, beliefs and aspirations. It is also the larger culture in which the organization culture is hosted. Delving into other social science disciplines we find that cultural theorists have examined the numerous mechanisms within societies that convey and reinforce a nation’s culture. Not least of these mechanisms are institutions such as education systems, political systems, religion, literature, television, newspapers and other mass communication media, family and community discourse, and work (for example, Hall 1978; Thompson 1963; Williams 1961, 1980). Not surprisingly, when we enter the workplace we carry our national culture with us. Even the most distinctive organizational culture is not a closed system, it is populated with people who bring a lifetime of cultural experience with them. To date, knowledge management and the learning organization have not fully incorporated this perspective into theorizing. As Holden (2002, 81) suggests “one of the problems in the knowledge management literature is that authors give the impression that knowledge management operates in a kind of unitary vacuum, in which diversity in terms of language, cultural and ethnic background, gender and professional affiliation are compressed into one giant independent variable, which is in any case pushed to the side”. Hence he approaches from a different angle by attempting to make sense of culture from a knowledge management perspective. Holden regards cross-cultural knowledge, learning and networking as a key resource for international business and proposes redesigning cross-cultural management as a knowledge domain. There is a growing body of research on cross-cultural issues in management and in organizational psychology. Much of this work rests on the recognition that concepts, theories and techniques from a predominantly Euro-American tradition are not “universalities and, therefore, may not be directly applicable in other cultures (Pauleen and Murphy 2005; Smith, Fischer, and Sales 2001). This issue first gained prominence in the management literature with the work of Hofstede (1980). Although some may debate aspects of his research, there is no denying that it highlighted differences between Western cultures and Eastern or collectivist cultures. Hofstede’s work is the most widely cited in cultural studies (Bing 2004; Hoppe 2004; Triandis 2004) and his constructs provide insights when conceptualizing the dynamics of national culture. Similarly, HampdenTurner and Trompenaars (1993) distinguished between more self-seeking American styles of learning and knowledge sharing, and the more group based practices of Asian cultures. Serendipitously, cultural differences are displayed in an international study of academic and practitioner knowledge management experts (Scholl et al. 2004). The study sought opinions on theoretical and practical issues for knowledge management in the future. The findings focus on these issues, but they also analyzed comparisons of responses according to the geographical region of the respondents. Interestingly they found significant differences in the opinions of German respondents compared with all non-German respondents. Although not intended as such, this is some evidence of the influence of national culture on priorities and emphasis in knowledge management. In the rest of this chapter we report on a study that looked specifically at the issue of the impact of national culture on the implementation of Senge’s learning organization concepts. This is instructive for both knowledge management and the learning organization, whose literatures are increasingly entwined (Vera and Crossan 2003).

Asian Organizations Meet North American Management Theory

THE CASE OF SINGAPORE AND SENGE

The Case Study Organization This case study explores the influence of national culture on the practice of Senge’s learning organization concepts in a Singaporean government organization. In Singapore, the government relies on the public bureaucracy as the major vehicle for formulating and effecting social and developmental changes. Thus the public sector presents an ideal venue for studying the implementation of new policies or management concepts. In order to maintain confidentiality we have used the organizational pseudonym of Singapore Century (SC) throughout this case study report. One of the largest government organizations, SC is a key provider of public services in Singapore. Just like other public sector organizations in Singapore, SC consists of civil servants and bureaucrats who are vested with public authority. Typically public sector organizations in Singapore are bureaucratic in nature and employees are traditionally oriented. These characteristics produce inflexible, self-preserving organizations, which makes it difficult for public officials to deal with rapid changes and challenges as the country embraces the knowledge economy. Thus the Singapore Public Service for the Twenty-First Century (PS21) initiative was launched with an aim to increase efficiency, provide better service, and promote learning in public sector agencies. In response to this SC introduced the learning organization concept in 1997. Besides supporting the call by PS21 to promote learning in the public service, there were two other important reasons for implementing learning organization concepts in SC. First, the chief executive officer (CEO) was a strong advocate of the learning organization concept after attending a conference on systems thinking where he met consultants from Massachusetts Institute of Technology (United States) who provide training on the concepts. Second, he took over SC in 1997 and made a break from the bureaucratic, authoritarian culture by promoting organizational learning using Senge’s concepts of the learning organization. Since then, SC has introduced various changes and has put in place structures to facilitate learning in the organization. Today, SC is highly regarded and consulted by other organizations on the practice of learning organization concepts.

Investigating Learning Organization Concepts To explore the influence of national culture on the practice of learning organization concepts this case study research was conducted using ethnographic methods. The ethnographic research process involves participating in the group or society to be studied ranging from everyday conversations to more formal, semistructured, in-depth interviews, in order to understand observed phenomena. A distinctive feature of ethnographic inquiry is its explicit focus on the features of a given culture with the aim of exploring the relationship between culture and behavior. In this case ethnographic fieldwork was carried out for a period of six months in the SC organization. Face-to-face interviews lasting about 60–90 minutes were carried out with 20 SC staff members. An interview guide was derived from both the literature, and a preceding pilot study to gather information on three key issues: the participants’ understanding of learning organization principles, the participants’ perceptions of the importance of learning, and their perceptions of how the traditional Singaporean

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Cross-Cultural Perspectives on Knowledge Management culture shapes or hinders the application of the learning organization principles. The in-depth interviews were supplemented with observations of staff meetings, informal conversations with SC clients, analysis of company documents such as newsletters, printed internal and external publications, CD-ROMs and brochures that were made available to the public.1

How the Cultural Dimension Was Explored The fundamental argument in the organizational literature on national culture is that each nation has developed some unique understanding of organization and management through its history (e.g., Hofstede 1980). The influence of national culture on organizations comes through societal structures (for example, education systems and political systems) and through values and behaviors of organizational participants (Adler and Doktor 1986). The pervasive influence of national culture on human behavior in organizations has prompted several researchers to develop studies that approach and classify national culture in different ways (e.g. Hall 1960; Hofstede 1980; Hofstede and Bond 1988; Kluckhohn and Strodtbeck 1961; Laurent 1983; Hampden-Turner and Trompenaars 1993; Trompenaars 1984). In this case study we used Hofstede’s cultural dimensions to assist analysis. Hofstede’s pioneering work was an attempt to compare national cultures in terms of broad value differences (Hofstede 1980, 1983). In his extensive study of more than 116,000 employees of IBM in 50 countries, Hofstede identified four cultural dimensions of work-related value differences. These four dimensions are power distance, individualism/collectivism, uncertainty avoidance and masculinity/femininity. A fifth dimension, labeled “Confucian dynamism,” was subsequently added to the cultural framework (Hofstede and Bond 1988). Confucian dynamism epitomizes “Asian values” and also shows the importance of Confucianism to all East Asian societies (Ralston et al. 1991). This case study used three of Hofstede’s national culture dimensions and they are briefly explained below: Power Distance refers to the extent to which people of a particular country are said to accept inequality in power as an irreducible fact in organization. This influences the amount of formal hierarchy where subordinates accept that the superiors have more power and decisions made by them are unquestioned. In this dimension, Singapore was classified as high on power distance (Hofstede 1980). Individualism/Collectivism means the concern for oneself as an individual as opposed to concern for the priorities and rules of the group to which one belongs. People in individualistic cultures tend to think of themselves as “I,” distinct from other people. Collectivism refers to cultures where the interests of the group take precedence over the interests of the individual. Singapore scored low on individualism in Hofstede’s study. Confucian Dynamism refers to values such as respect for tradition, ordering relationships by status, protecting one’s face (social reputation) and having a sense of personal steadiness and stability. Singapore scored highly on this dimension. Hofstede (1983) notes that the most relevant dimensions for understanding leadership and management were power distance and individualism/collectivism. The values under these dimensions are helpful for analyzing and understanding leadership style, dialog and experimentation, which are key elements of the learning organization principles. The Confucianism dimension was selected because it has a strong influence on the leadership

Asian Organizations Meet North American Management Theory style and work behaviors of east and south-east Asian societies. Singapore is a multicultural country with a population of 4.2 million, comprising 76.8 percent Chinese, 13.9 percent Malay, 7.9 percent Indian and 1.4 percent other (2000 census). As the majority of the country’s population is ethnic Chinese, it is not surprising that many organizations in Singapore consist of managers and employees who may share cultural values influenced by Confucianism (Taormina 1998). Also, Singaporean political leaders have frequently stressed the significance and relevance of Confucian ethics (Tan 1989; Tu 1999). Hence these three national cultural dimensions were used to analyze the attitudes and behaviors reported by SC staff on core features of the learning organization concept. In particular we report on: learning culture; shared vision; experimentation; team learning; dialog; trust; and overall perceived usefulness of these learning organization concepts.

Research Findings Creating a Learning Culture According to Marquardt (2002), the most important core element of the learning organization is the learning itself as it has the power to change people’s perceptions, behaviors, and mental models. This then facilitates, encourages and maximizes learning at individual, team, and organization levels (Marquardt 1996). The case study discussions on the importance of learning in relation to individuals, teams and the SC organization revealed different interpretations of learning. A significant majority of participants perceived learning as important for survival. This was explained in terms of their awareness of the economic changes that have taken place in Singapore over the years and the competitive atmosphere in which they now operate. For example, a junior manager commented: I guess learning is important to do the job faster and better. Frankly, if you can’t learn, you will not survive in the organization. The learning organization concept is introduced by the top management, so we must learn.

Viewed from this perspective, it appears to support Schein’s (in Coutu 2002, 103) argument that “all learning is fundamentally coercive because you either have no choice or it is painful to replace something that is already there with some new learning.” The environmental threats and the launch of the learning organization movement appear to have created a high level of survival anxiety among the SC staff. According to Schein (in Coutu 2002), some organizations increase survival anxiety in order to motivate employees to learn. The SC responses show that staff viewed learning as important owing to the changes initiated by the top management, and also for economic reasons. A minority of the participants expressed different feelings about learning. They explained that more educated people are joining the organization and it is important to keep abreast with knowledge: As a leader, I need to improve myself intellectually as well as for the organization. It is important because we are now having a lot of young managers and we need to maintain our respect as their superiors.

In part, the implied reason for the preceding quote is power. The idea of superiors being perceived as more knowledgeable and intelligent than the lower-rung staff is

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Cross-Cultural Perspectives on Knowledge Management located within the traditional cultural context. Being a traditional bureaucratic organization, superiors are seen as people with more power which implies that they also have so-called superior knowledge. In Hofstede’s terms this reflects Singapore as a high power distance culture. Furthermore, there is an automatic expectation by junior staff that superiors must be looked upon as someone with higher or superior knowledge. This pattern of behavior also reflects the Confucian ideology of governance in Singapore. The cultural values seemed to influence the notion of learning, in the sense that some senior managers acknowledged that they need to learn in order not to ‘lose face’ among new or junior staff. A senior manager summarized: We cannot lose face with our new graduate managers. As superiors, we need to maintain our power and respect. This is Confucius wisdom and this is the way our culture is and we still follow it in our organization and at home.

The concept of face plays a major role in shaping the thinking of organizations and people at large in Singapore. Briefly stated, face refers to the “social reputation, which is achieved by getting on in life through success and ostentation” (Hu 1944, 45). As a result, behaviors are controlled by the desire to enhance one’s face in the community. In this context, superiors want to maintain their self-esteem among the juniors in order to feel good about themselves, while juniors want to learn to maintain ‘face’ with colleagues and superiors. In summary, despite attempting to create an environment and processes that encouraged learning, it appears that staff in SC did not maximize their learning opportunities. Although all of them understood the importance of learning, the interpretation of learning was more associated with the nature of the task and also the kind of position they held in the organization. It appears that Singapore’s high power distance underlying the cultural behavior of respect for hierarchy and position has limited thinking about the nature of learning at work. Learning viewed from this perspective is non-challenging, as it will only serve to preserve the existing order in the organization. It is clear that these leaders needed to learn “how to learn” in order to move beyond this level to one that results in collective learning, that is, organizational learning.

Collective Commitment and Collective Avoidance One of the much-discussed elements of the learning organization is the principle of ‘shared vision’. Shared vision is building a sense of commitment in an organization by developing shared images of the future. This includes developing the principles and guiding practices used to reach the goal. In many organizations the mission or vision statement is often a tangible symbol of the shared vision (Senge 1990). It is argued that without a shared vision an organization cannot be called a learning organization (Harvey 1988; Senge 1990; Stacey 1993). According to Marquardt (2002, 74), it is difficult for any organization to have great achievements without a “deeply shared vision.” Several interesting themes were raised in response to questions about the usefulness of shared vision to oneself and others in the organization. All participants indicated their commitment to the big vision of becoming a learning organization. They expressed strong support and enthusiasm toward this vision that was initiated by the CEO in 1999. This support was summarized by a manager:

Asian Organizations Meet North American Management Theory I think it is real … hmm [great]. I know it’s the CEO’s ideas. Everyone is talking about learning organization and people are working towards it. Though I did not participate in forming the vision I am committed to it.

Senge (1990) and other researchers (Wheatley 1992; Watkins and Marsick 1994; Marquardt 2002) have pointed out the importance of collective participation in the process of visioning. However, the interviews and discussions show that the lack of a communal approach toward crafting of the vision was not an issue for the participants, as can be interpreted from another manager’s comments: It is common in our organizations for vision to be from the top. If people don’t like the vision, then [they] just take it as another instruction from top management.

Although it is crucial for leaders in a learning organization to seek the participation of staff throughout the organization in the visioning process, the research participants’ responses do not support this. Two factors may have contributed to this situation. The first was clearly a cultural aspect. Singaporean employees are well known for their compliant mentality. Thus, not surprisingly, the communal approach to visioning may not be important to staff on the basis of traditional order where visions are exclusively carried out by the top management. The second factor was an assumption that top management officers were better thinkers than non-management staff. An example illustrates this line of reasoning by a junior staff member: Vision is created by people who are paid highly for thinking and decision-making. Whether we are involved in it or not is not so important. We are ground people. We take the vision as a guide to do our work properly.

The assumption that people at the top in the hierarchy are more intelligent and capable of making decisions that are beneficial to the majority is still prevalent in Singaporean organizations and is consistent with Hofstede’s concept of high power distance. It is also clear that this kind of cultural thinking among participants may well work against the process of visioning. Even if given the opportunity to contribute to visioning, it is uncertain that staff will genuinely participate. The visioning process is an important step toward becoming a learning organization and the fact that this element was missing questions the compatibility of learning organization concepts with a culture that is not able to reconcile personal and organizational goals. The learning organization seeks synergistic alignment between the two. The overall impression from the interviews was that the majority of the participants were skeptical about a shared vision and the importance for staff to be committed to both personal and organizational development. Two contradictions emerged: one at the cultural level, the other at the individual. At the cultural level, the participants saw themselves as the recipients of a vision statement, not the creators of the vision. At the individual level, they were not sufficiently motivated to be involved in such processes, as they perceived that their involvement would make little change or contribution. This reflects the overall nonparticipative decision making process so characteristic of bureaucratic Singapore public service sectors. According to Senge (1990), the significance of a shared vision lies in the idea that such a vision would represent a balance of competing interests in the organization. However, this case study suggests that visioning by the top management is considered acceptable and natural in Singapore. The participants tended to see the efforts to promote shared

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Cross-Cultural Perspectives on Knowledge Management vision as “for show only.” This skepticism is a reflection of their cultural preference for high power distance.

Constraints over Experimentation An experimental culture is an important element and a basic requirement for a learning organization (Argyris and Schon 1996; Gephart et al. 1996: Senge 1990). According to Nevis, DiBella, and Gould (1995, 80), “if learning comes through experience, it follows that the more one participates in guided experiences, the more one learns.” Therefore venturing into uncharted waters and experiencing the failures that may occur is an important part of organizational learning. The major challenge in an organization is to encourage members to experiment, innovate and learn in the process. According to Goh (1998), superiors must facilitate individuals and teams toward continuous improvement through work processes that result in new ideas. Special effort must be made to make people realize that risks or mistakes are a necessary part of achieving organizational learning and effectiveness (Marquardt 2002). The findings in SC showed that there was some awareness among people that experimentation is valuable to the organization and staff. However, almost all the participants, including those who were receptive toward experimentation, expressed fears of exposing their vulnerabilities. There is a strong desire in Singaporeans to succeed. But failure, we cannot imagine. Too many consequences to face in our job. It is natural for us not to let our bosses and colleagues know our failures or mistakes.

One main reason why Singaporean employees hesitate to make mistakes is the fear of failure and criticism by superiors. Staff members are conscious that if a mistake takes place in the process of experimentation, it will be met with ridicule and reprimand. Comments such as “encouraged to experiment, but not to fail,” “mistakes can be very scary here,” and “I don’t want to become a scapegoat” are indicative that failure is associated with embarrassment and low self-esteem. It also appears that staff place great emphasis on potentially undesirable outcomes and that this strongly inhibits experimentation. Two factors contributed to the perceived low level of tolerance for failures in the organization. First, some staff members are risk averse—preferring to use old, safe methods rather than trying something new that may “get them into trouble.” Second, Singaporeans’ face-saving attitude (maintaining self respect), as explained previously, was seen as a particularly important cultural factor, which explains the tensions between the idea of experimentation and staff members’ risk averse responses. In sum, staff generally viewed experimentation in a positive light. At the same time, in practice, most of the participants did not feel safe to experiment. The fear of mistakes or failures was influenced by previous reactions in the organization when failure had occurred. This was further aggravated by the cultural preference toward face saving. These factors may seriously impede experimentation and recognizing them is essential in reducing their effects. This is a critical challenge for Singaporean organizations to address in the journey to become a learning organization.

Asian Organizations Meet North American Management Theory

Team Learning According to Senge (1990) teams are the key learning group of organizations. He saw team learning as “the process of aligning and developing the capacity of a team to create the results its members truly desire” (Senge 1990, 236). He noted that talented teams are made up of talented individuals and it is team learning, not individual learning, that adds to organizational learning (Senge 1992). Discussion in SC of the principle of team learning indicated a common understanding that it is characterized by a sharing of knowledge resulting from team projects and meetings. SC had structures and processes in place for intra-functional and inter-functional learning among members. This is consistent with the research of Pearn, Roderick, and Mulrooney (1995), which considered that cross training and continuous learning are indications of an organization that is evolving to be a learning organization. Although team learning was portrayed as a characteristic of the organization by a significant majority of the respondents, some of them felt that the team learning practiced in the organization was not the same as that advocated by Senge (1990). For example, a manager explained: Teamwork, teambuilding are not new to us. We are doing it all the time. Our kind of team learning is the same old way of discussion and learning from the more experienced staff. The team learning that I learnt from the learning organization course is different. It requires lots of open discussion and learning from each other without the fear of offending anyone in the session.

This indicates that participants gained a new and different understanding of team learning associated with learning organization principles. At the same time, there was some awareness of the difference between teamwork and team learning. For instance, when participants were asked to explain their process of team learning, one manager summarized it as follows: We have the daily review meeting (DRM) for all of us to learn from each other. Every team reports about its customers/problems and what happened and what it did. Though members are encouraged to question or disagree most of the staff prefer not to voice their opinions in the presence of their managers. I am not sure whether any real learning takes place in our team learning sessions.

This quote and other discussions with participants show no sign of the intellectual, emotional, social, and spiritual challenges that constitute Senge’s concept of the process of team learning. A significant number of participants expressed dissatisfaction with the way it was practiced in the organization. Two reasons were highlighted throughout the interviews. One was that the staff did not feel comfortable to engage in open communication in the presence of their team leaders, who were their immediate superiors. Second, the team learning sessions did not generate interest or open up possibilities for learning through inquiry. These explanations highlight the predicted relationship between a high power distance culture and the preferred behavior of staff members. Comments such as “surely we can’t really question other senior members during the session” and “how to explain things in front of team leaders” show the influence of a bureaucratic system that explains the inability of the organization to learn effectively (Senge 1990). In the case of SC there seems to be more collective avoidance than collective learning.

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Muddled Distinctions—Discussion versus Dialog Dialog is defined as “sustained collective inquiry” into everyday experience that we take for granted (Isaacs 1999, 357). The learning organization advocates the practice of dialog to understand the context of daily interaction and experience and become aware of the processes of thought and feeling that created that experience (Senge et al. 1994). Also the purpose is to honor the development of individuals, ideas, and organization at a very deep level. It opens paths to change and clears space for organizational transformation (Brown 1995). Thus it is argued that dialog is one of the communication tools that enables organizations to realize the vision of becoming a learning organization (Kofman and Senge 1994; Schein 1993; Senge 1990). Participant responses to questions about the practice of dialog and its importance to organizational learning and effectiveness, showed that there was a general understanding that dialog was regarded as a tool to facilitate discussions and meetings without prejudice to status and power. The objective was to promote open discussion and communication that resulted in effective problem solving among members. Despite this understanding, the respondents’ receptiveness was not reflected among most of the middle managers. A supervisor forcefully expressed it as follows: Dialog is good as it promotes open communication among staff. But this is difficult for us because it is dangerous to speak what is in your mind. Also, it is not polite to point out that someone’s idea is not right, especially if they are in a higher position than you.

This quote and other discussions with middle managers show the dilemma associated with the practice of dialog in the organization. First, it shows the difficulty of changing the culturally entrenched communication practices among SC staff members. Second, most of the participants found it “unsafe” to speak or relate their feelings about issues in the presence of their superiors. Employees in Singapore accept the high power distance between superiors and subordinates, and this cultural norm inhibits the process of dialog from taking root in the organization. The findings also reveal that although the cultural context in which dialog took place was important, it was the way it was carried out in the organization that really mattered for the participants. Traditionally, Singaporeans in lower-level positions are accustomed to the behaviors expected of them, such as listening and supporting superiors and others during meetings. Having worked for years under rigid authority, junior staff members have difficulty transforming themselves into speakers, and as a result, they miss out on the opportunity for deep thinking and exploration. It is clear that these conservative values inhibited attempts at dialog in the organization.

Trusting Relationships According to some researchers trust is an essential element in a learning organization (Davenport and Prusak 1997; Pillai, Schriesheim, and Williams 1999; Senge 1990). The development of a relationship based on trust between management and non-management employees is critical to the success of a learning organization. West (1994) contends that the concept of the learning organization demands a greater recognition of the importance of trust, which influences both individuals and organizational

Asian Organizations Meet North American Management Theory learning. Trust, in this sense, is a necessary condition for creating a learning culture (Senge 1990). Several themes emerged from the interviews and discussions on the importance of trust among SC staff. First, some managers acknowledged that a low level of trust did exist among staff in SC, and also affirmed that trust is necessary to achieve the vision of becoming a learning organization. One senior manager declared: I must say that without trust, we cannot hope to be called a learning organization. All leaders must know that they need to put much effort in building trust among their men (i.e., junior staff). High level appointments can do wonders but not without trust.

As this quote suggests, there seems to be some evidence that the organization has low levels of interpersonal trust between management and non-management members. All leaders interviewed commented that it was a difficult and time-consuming task to develop trust among members. These senior managers also explained that they could not delude themselves by expecting the junior staff to trust them because of their status in the organization. The findings show that the majority of the staff understood that developing a climate of trust takes much time and commitment and is also dependent on consistent behavior, mutual respect and shared expectations among people. This is in line with Taylor and Easterby-Smith (1999) who claimed that trust is generally earned slowly and leaders cannot expect trust from their members solely based on their status or position. In spite of the efforts of these managers to create a trusting environment, there was no mutual trust as expected or desired. This was clearly indicated by a middle manager’s comments: I have worked here for 12 years. Just because my boss is trained in the learning organization now does not mean that I can trust him totally. It is not easy for a leopard to change its spots. Those who have power cannot change so easily. You can ask anybody, the answer will be the same.

Similar comments were voiced during other interviews. This suggests that the lack of trust in superiors is a widely held view among participants. Comments such as “trust is important, but not with top management”; “we pretend to trust each other”; and “actually, they don’t trust us as individuals” show that trust cannot be assumed to exist within SC. The findings also show that the source of the problem lies in the top-down control dominating the organization. Fear of authority and hierarchy appears to have generated a low level of trust throughout the organization. Seen from this perspective, it can be argued that the lack of trust among SC staff has its roots in the authoritarian and hierarchical culture of Singapore.

Usefulness of the Learning Organization Concept Responses to questions about the applicability and usefulness of the learning organization concept were generally positive with some reservations and concerns in relation to SC. Though most of the respondents favorably viewed the learning organization as an opportunity for personal and organizational growth and development, they still expressed concerns that it was not in the interest of a hierarchical organization to effect

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Cross-Cultural Perspectives on Knowledge Management sweeping cultural changes, which were critical for pushing the learning organization concept forward. As commented by a senior manager: If we over indulge in the learning organization concept, the top management might loose its authority, its ability to keep its executive command … because learning organizations encourage a lot of questions, clarifications … I think command and authority is still very important. We have to be careful and not over do it.

This quote points to a major concern that the practices of the learning organization could reduce the bureaucratic system and power relations that senior managers have enjoyed all these years. It appears that for the senior managers, the feeling of losing control over employees was a strong motivator in opposing the learning organization concept. At the middle management level, the usefulness of the learning organization concept was consistent with senior staff thinking which favored ‘good working relationships’ as the desired means for open communication and team learning. Some comments such as “I am more receptive to my staff’s ideas” and “it helps me to look at the bigger picture” show that some transformation was taking place in the realm of “everyday practice,” which had an effect among organizational members. Although this tends to be a positive portrayal of the acceptance of the learning organization concept, more than a few managers were skeptical about its usefulness in the long run. For example, one manager, with a tinge of frustration, elaborated: Quite typical, in that sense that even though we are beginning to learn and change through learning organization principles but there are still a lot of underlying strings or attachments in it. In SC, still a lot of top down things. I really can’t see much difference in people’s behavior.

The directive style of management seems to have been a major obstacle for people who were skeptical about the usefulness of the learning organization. Similar comments such as “we still cannot push our ideas to top management”; “they still think we are not any better than they are”; and “we need a new set of people in SC to see the difference” illustrate the traditional working culture that permeated the organization. The characteristic of good working relationships between superiors and subordinates appeared to lie principally within the national cultural context of the organization. Although the overall view of the usefulness of the learning organization concept did not deny that traditional behaviors and beliefs are dominant inhibiting factors, participants saw it as essentially a soft approach. They feared its potential effect on the overall organization would erode other valued practices such as respect for senior managers and the paternalistic relationship to employees. A junior manager summed up this concern: Learning organization is a soft approach and Singaporeans are not used to a soft and open style of managing their people. We cannot be like the Westerners. We are Singaporeans.

Participants claimed that the learning organization style of management may not be “appropriate” for a “tough country” like Singapore. Such responses appear to emanate from unequal structural relationships between people in society. Again, this is reflective of Singapore’s high power distance. On this basis, they doubted its effective application within the Singapore organizational cultural context.

Asian Organizations Meet North American Management Theory

Singapore Organizations and the Learning Organization Singapore has been a successful country to date, and its future success will depend upon its ability to become a learning nation, according to Goh (1997). Hence, the Singapore government aspires to the broad integration of learning organization principles in its organizations. Many organizations in Singapore have implemented the learning organization concept and the number doing so appears to be increasing. However, the findings in this case study show that many traditional Singaporean values and behaviors are in conflict with learning organization principles, which after all were developed in a North American context. As Pauleen and Murphy (2005, 22) note “information and knowledge management models that exclude the influence of national and regional culture seriously undercut their potential effectiveness, particularly in global applications.” A key related issue of how Singapore organizations will respond to the learning organization concept was discussed with all the participants in the case study. The majority of participants strongly emphasized that the current reality of the work relationship is an expression of Singapore’s culture, emanating from the unequal structural relationship between people in society. The following example illustrates a manager’s perceptions of employee attitudes and behavior toward hierarchy and his concern over the clash with the practice of learning organization: Organizations in Singapore are all the same. People are conscious of their status and position in the organization and they behave accordingly. It is the same as our family. Learning organization can only work if we can change this belief in hierarchy.

This highlights the indoctrination of employees into organizations and the importance employees give to power relationships in organizations. A respectful attitude, obedience and decorum were represented as “appropriate” behavior among employees in organizations. The majority of the participants claimed that the learning organization and Singapore organizations represent two opposing ways of being. This suggests that the source of the issue lies in the beliefs, attitudes, and values of Singapore society—the national culture. These have a strong impact on the behavior of employees in the work place. The case study shows that despite the many positive examples cited for the changes taking place in relation to the practice of learning organization principles, the respondents’ concern over its continuity and success indicates that the nature of the traditional style of management with its cultural traits may threaten the entire process of the learning organization.

IMPLICATIONS OF NATIONAL CULTURE FOR KNOWLEDGE MANAGEMENT Learning organization techniques are good but may not be applicable for all situations. Ours is a direct and autocratic approach. It may take generations before we can totally think and work like a learning organization. It is not easy because our government must change first, then our people can change. (Junior manager)

This case study shows that national culture plays a major and influential role in constraining the practice of learning organization concepts. Knowledge management and learning organization principles share common ground in promoting

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Cross-Cultural Perspectives on Knowledge Management learning and a knowledge based culture. They both seek to achieve this by creating structures, processes, and behaviors for capturing, sharing and using knowledge for effective organizational performance. As Alavi and Leidner (2001, 123) noted “knowledge management consists of a dynamic and continuous set of processes and practices embedded in individuals, as well as in groups and physical structures.” Hence, the cultural barriers that were identified in the case organization are instructive at a number of levels for practitioners and researchers. At a specific country level the case study provides a useful set of insights for practitioners considering implementing knowledge management strategies in Singapore. At a more general level it provides further evidence of the impact of national culture on organizational behavior, and raises issues for multinational organizations, trans-national consulting advice and practices, and any organization considering implementing ideas based on different cultural assumptions. In the specific instance of Singapore, the case starkly illustrates how this national culture conceives of organizations, organizational membership, and all the activities that occur in relation to organizations. In common with the findings of Hofstede (1980), the SC case reveals an intellectual sympathy with new ways of doing things but an unwillingness to follow through in changed behavior due to high power distance, low individualism, and Confucian dynamism. One could even argue that the expressed sympathy with new ideas is merely another way of maintaining ‘face’ which emerged as such an important driver of behavior. A key tension in the case was the fear of expressing something that offended or went against the thinking of superiors in the organization. It is inherent among Singaporean employees to protect themselves from any loss of self-esteem or self image that has been achieved in one’s position or status in the organization. As Senge and others (1994) suggested, organizational members are capable of organizing and operating in ways that are incredibly efficient at keeping themselves from learning. These case study findings are in line with Senge’s interpretation that cultural factors are the main inhibitor of the organization’s ability to learn effectively. Practitioners working with Singaporean organizations to introduce knowledge management strategies will need to be mindful of these cultural drivers. The respect for power, status, and order will affect implementation strategies and the ability to get good feedback on issues. For instance, to address this, feedback groups may need to be made up of similar status employees so that people feel free to speak. More generally, organizations seeking to implement knowledge management initiatives in non-Western and even different Western cultures must understand and pay specific attention to the dynamics of cultural behavior and values of the employees. An understanding of the nuances of cultural traditions is important before an institutional implementation is attempted. Organizational culture is highly influenced by national culture and institutional change must take this into account. Essentially practitioners have two main options: (1) to try to apply a “best practice” approach to knowledge management, changing the organization and behaviors to fit; or (2) to adopt a more contingent approach recognizing and embracing the national culture and creating knowledge management strategies to fit the culture. The best practice option has had appeal for a number of years to practitioners in other management fields, for instance human resource management, and to some consulting firms. Often this has been fuelled by the desire to replicate the strategies employed by successful companies. Sometimes

Asian Organizations Meet North American Management Theory it has also been encouraged by an aversion to risk or experimentation, and even by lack of in-depth understanding of the organization. Adopting a more contingent approach requires the imagination and courage to do things without a best practice template, and instead, to develop the practices that will be best for that particular organization. For example, in international businesses Holden (2002) suggests valuing cross-cultural knowledge and networks, and indeed we would argue that they may be helpful in arriving at the best knowledge management practices for those particular businesses. Not surprisingly, we recommend that research on management and organizational change must take into account the national culture in which the organization exists. This is particularly important when the change is being guided and driven by concepts imported from another culture. An understanding of national culture holds the potential to be a powerful analytic tool with which to lay foundations for developing models and concepts. Thus, an extended approach to cross-cultural comparative studies in learning organization and knowledge management practice across countries is suggested. The broader management research literature, particularly human resource management, is rich in critiques of “one best way” or best practice versus contingent or “best fit” approaches (e.g., Purcell, 1999). The knowledge management literature should be mindful of, and learn from, this existing academic debate of the issues associated with the implementation of management and organizational strategies.

NOTE 1. A full description of the methodology used in the research can be found in Retna, K. S. 2005. National culture and Senge’s learning organisation. PhD thesis, School of Management, Victoria University of Wellington, New Zealand.

REFERENCES Adler, N., and R. Doktor 1986. From the Atlantic to the Pacific century: Cross- cultural management reviewed. Journal of Management 12 (2): 295–318. Alavi, M., and D. E. Leidner 2001. Knowledge management and knowledge management systems: Conceptual foundations and research issues. MIS Quarterly 25 (1): 107–36. Argyris, C. 1990. Overcoming organizational defenses: Facilitating organizational learning. Boston: Allyn and Bacon. Argyris, C., and D. Schon 1978. Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley. Berger, P., and T. Luckmann 1967. The social construction of reality: A treatise in the sociology of knowledge. London: Penguin. Bing, J. W. 2004. Hofstede’s consequences: The impact of his work on consulting and business practices. Academy of Management Executive 18 (1): 80–87. Brown, A. 1995. Organisational culture. London: Pitman Publishing. Carter, C., and H. Scarbrough 2001. Towards a second generation of KM? The people management challenge. Education and Training 43 (4/5): 215–24. Coopey, J. 1995. The learning organization: Power, politics and ideology. Management Learning 26:193–213. Coutu, D. L. 2002. The HBR Interview: the anxiety of learning, Harvard Business Review 80 (3): 100–106.

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Cross-Cultural Perspectives on Knowledge Management Davenport, T. H., and L. Prusak 1997. Working knowledge: How organizations manage what they know. Cambridge, MA: Harvard Business School Press. De Long, D. W., and L. Fahey 2000. Diagnosing cultural barriers to knowledge management. The Academy of Management Executive 14 (4): 113–27. Fenwick, T. 1998. Questioning the concept of the learning organization. In Learning for life, eds. S. Scott, B. Spencer, and A. Thomas, 140–52. Toronto: Thompson Educational Publishing. Firestone, J., and M. McElroy 2003. Key issues in the new knowledge management. Boston: Butterworth-Heinemann. French, W. L., and C. H. Bell 1973. Organization development: Behavioral science interventions for organization improvement. Englewood Cliffs, NJ: Prentice-Hall. Gephart, M. A., V. J. Marsick, V. Buren, E. Mark, and M. S. Spiro 1996. Learning organizations come alive. Training and Development 50 (12): 34–45. Goh, C. T. 1997. Shaping our future: thinking school, learning nation. Speeches 21 (3): 12–20. Goh, S. C. 1998. Toward a learning organization: The strategic building blocks. SAM Advanced Management Journal 63(2): 15–22. Gorelick, C., and B. Tantawy-Monsou 2005. For performance through learning, knowledge management is the critical practice. The Learning Organization 12 (2): 125–39. Hall, E. T. 1960. The silent language in overseas business. Harvard Business Review, May–June: 87–96. Hall, S. 1978. Policing the crisis: Mugging, the state, and law and order. London: Macmillan. Hampden-Turner, C. M., and F. Trompenaars 1993. The seven cultures of capitalism: Value systems for creating wealth in the United States, Britain, Japan, Germany, France, Sweden and the Netherlands. London: Piatkus. Harvey, J. 1988. Making it happen. London: Fontana Hofstede, G. 1980. Culture’s consequences: International differences in work-related values. Beverly Hills, CA: Sage. ———. 1983. The cultural relativity of organizational practices and theories. Journal of International Business Studies 14 (2): 75–89. Hofstede, G., and M. H. Bond 1988. The Confucius connection: From cultural roots to economic growth. Organizational Dynamics 16 (4): 4–21. Holden, N. 2002. Cross-cultural management: A knowledge management perspective. Upper Saddle River, NJ: Financial Times Prentice Hall. Hoppe, M. H. 2004. Introduction: Geert Hofstede’s culture consequences: International differences in work-related values. Academy of Management Executive 18 (1): 75–79. Hu, H. C. 1944. The Chinese concept of “face”. American Anthropologist 46:45–64. Ikehara, H. T. 1999. Implications of Gestalt theory and practice for the learning organization. The Learning Organization 8(4): 141–52. Isaacs, W. 1999. Dialog and the art of thinking together: A pioneering approach to communicating in business and in life. New York: Currency. Kilman, R. H. 1996. Management learning organizations: Enhancing business education for the 21st century. Management Learning 27 (2): 203–37. Kluckhohn, F., and F. L. Strodtbeck 1961. Variations in value orientations. Evanston, IL: Peterson. Kofman, F., and P.M. Senge 1994. Communities of commitment: The heart of the learning organization. In The learning organization in action, ed. D. J. Bohl, 7–25. New York: American Management Association. Lang, J. C. 2001. Managerial concerns in knowledge management. Journal of Knowledge Management 5 (1): 43–57. Laurent, A. 1983. The cultural diversity of Western conceptions of management. International Studies of Management and Organization 13 (1–2): 75–96.

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11 The Peruvian Asparagus Cluster: Realizing Profitability from Social Capital and Shared Knowledge Management in a Traditionally Low-Trust Environment Luis S. Chang

ABSTRACT This chapter presents the Peruvian asparagus cluster story. It discusses how Peru became the top exporter of fresh asparagus in the world and the second largest producer. This success is not only due to Peru’s climate, which allows the growing of asparagus all year round; the industry’s breakthrough came from the collective action and shared knowledge management of a group of business people determined to tackle the problems in the complex asparagus logistic chain. A strong entrepreneurial vision and perseverance in trust building were key to this hallmark case. Moreover, this happened in a country with a long history of particularly low trust. The case study is preceded by a discussion of the low levels of trust in Latin America and Peru, explained by the analysis of values, culture, institutions, and history. A theoretical framework is provided by using three approaches: the Prisoner’s Dilemma (from game theory), evolutionary biology, and mental models. These approaches provide the background to understand the basis of cooperation and whether it is possible in noncooperative populations. Some conclusions are drawn by applying insights given by this framework to the Peruvian asparagus cluster case, signaling hope for trust and cooperation building in other clusters and eventually in Peruvian society.

INTRODUCTION Peru is the second-largest producer and the number-one exporter of asparagus in the world, supplying the American and European markets with high-class fresh asparagus and competing with suppliers who are much closer to those consumer markets including their domestic producers. The success of the Peruvian asparagus cluster is due not

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Cross-Cultural Perspectives on Knowledge Management only to particularly favorable climate conditions of the Peruvian coast but primarily to shared knowledge management by the cluster’s members to significantly improve the complex asparagus logistic chain. All these joint entrepreneurial efforts took place in a country that has long been characterized by a low-trust environment. This chapter provides a discussion on a series of issues related to the low-trust situation in Latin American societies, including Peru, and how internal and external factors made collective action in the Peruvian asparagus cluster possible. This, in turn, helped lead to the dominance of Peruvian asparagus in international markets. Based on this experience and analysis, strategies are given for improving trust and cooperation in other clusters and eventually in Peruvian society.

A LOW-TRUST ENVIRONMENT According to Corporación Latinobarómetro, a nonprofit organization that conducts an annual public survey in 18 Latin American countries consisting of 19,000 interviews on social and economic issues, Latin America is the region with the lowest level of interpersonal trust. The 2004 survey revealed that only 16 percent of Latin Americans trusted their co-nationals. The same percentage was reported for Peru (Corporación Latinobarómetro 2004, 31–32). Let us now address some issues that might explain why trust is so low in Latin American environments.

Trust and Social Capital Low levels of trust, which have historically existed in the Latin world, pose a severe problem for those countries. For Francis Fukuyama (1995), the welfare of a nation and its ability to compete are conditioned by the level of trust inherent in society, a feature he considers a pervasive cultural characteristic. Trust is the expectation that arises within a community whose behavior is normal, honest, and cooperative, based on common norms and shared by all members of that community. Fukuyama defines social capital as an instantiated set of informal values or norms shared among members of a group that allows them to cooperate with one another. Norms that produce social capital must include virtues such as truth telling and reciprocity. All societies have some stock of social capital. What varies is the extent of the radius of trust. There may be strong cooperative norms like honesty and reciprocity in a limited group of people but not farther into the rest of society. This is the case in China and Latin America, where family ties are strong and their members trust each other but not strangers, and therefore trust levels in public life are very low. Trust is the essential lubricant of all social activities that allow people to live and work together without generating a constant squandering flow of conflict and negotiations. Fukuyama rightly states that the generalized lack of trust in a society imposes a kind of tax in every form of economic activity, a tax which societies with high trust levels do not have to pay.

Values, Culture, and Development The importance of cultural values and attitudes and their link with development has been extensively discussed in Latin America in the past few years, with some

The Peruvian Asparagus Cluster

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Table 11.1 Culture and progress Values and attitudes

Progressive culture

Static culture

Time orientation

Future

Present or past

Attitude towards work

Work is central to good life

Work is a burden

Frugality and investment

Frugality is mother of investment and financial security

A threat to the egalitarian status

Education

Key to progress

Marginally important except for the elites

Personal advancement

Merit is central

Connections and family are what counts

Community

Radius of identification and The family circumscribes community trust extends beyond the family to the broader society

Ethical code

Rigorous

Loose

Justice and fair play

Universal impersonal expectations

Often a function of who you know or how much you can pay

Authority

Tends toward dispersion and horizontality

Tends toward concentration and verticality

Secularism

Small influence of religious institution on civic life

Substantial influence of religious institution on civic life

of the analysis presented at the Cultural Values and Human Progress Symposium, organized by the Harvard Academy for International and Area Studies and held in Cambridge, Massachusetts, in April 1999 (Harrison and Huntington 2000). Samuel Huntington defines culture “in purely subjective terms as the values, attitudes, beliefs, orientations, and underlying assumptions prevalent among people in a society.” And by “human progress” he means “movement toward economic development and material well-being, social-economic equity, and political democracy” (Harrison and Huntington 2000, xv). In this chapter we adopt this notion of culture and will use the phrase “value system that favors development/progress/prosperity” or “value system prone to development/progress/prosperity” as opposing a “value system resistant to development/progress/prosperity” as authors tend to use the terms “development,” “progress,” and “prosperity” in an interchangeable way to mean advancement of society. Some authors have defined sets of values, attitudes, or mind-sets that distinguish a progressive culture (one which favors development) from a static culture (one that is resistant to development). Although they are theoretical or ideal classifications, they help analyze how cultural forces shape the ability of a country to make progress. Lawrence Harrison provides a very interesting set as follows (Harrison and Huntington 2000, 299–300). Table 11.1 includes 10 mind-sets that help distinguish progressive cultures from static ones. The future orientation implies a progressive view of the world, a mind-set that assumes that one has influence over his or her own destiny and that rewards to virtue in this life are possible. This is in distinct contrast to the time orientation in static cultures that tend to exalt the past and emphasize the present, assuming a more fatalistic point of view and a belief that rewards to virtue will come after this life. Similarly,

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Cross-Cultural Perspectives on Knowledge Management progressive cultures have strong work ethics whereby diligence, creativity, and achievement are acknowledged and rewarded, whereas static cultures regard work as a burden. On the other hand, the narrow radius of identification and trust in static societies makes them more prone to corruption and less inclined to philanthropic practices. Finally, given the smaller influence of religious institutions on civic life in progressive cultures, heterodoxy and dissent are encouraged in them, whilst orthodoxy and conformity are more common in static cultures where religious institutions exert a stronger power over their members. For Harrison, developed countries score high as progressive cultures and Third World countries are much closer to the static culture typology. Mariano Grondona—an Argentine author and opinion maker—sets up a typology of two ideal value systems, one favoring economic development and the other resisting it. Actually some of the 20 cultural factors suggested by Grondona (2000) are similar to those proposed by Harrison. Grondona argues that a value system that favors development trusts the individual whereas societies that resist development emphasize control and oversight as a result of mistrust of the individual. Similarly, in the former there is general compliance with law; in the latter, law is a utopian ideal expressing people’s theoretical preferences, whilst the real world is in fact out of touch with all law, where furtive immorality and generalized hypocrisy predominate. For Grondona, Latin America is certainly closer to the development resistant value system which precipitated its severe crisis in the 1980s. He poses what he himself deems a controversial conclusion: that development or underdevelopment is not imposed from outside but rather it is society that has chosen either way (Grondona 2000, 47). These analyses of Latin America almost certainly apply to Peruvian society. In trying to explain the complexities of the Peruvian situation, Felipe Ortiz de Zevallos—dean of Universidad del Pacífico and president of Grupo Apoyo in Peru—discusses three concepts at the social, economic, and political levels related to values and cultures that stimulate development: 1. The fellow being. A country with values favoring progress and development accepts the concept of fellow man or neighbor as the set of people who take part in the same social process, without discriminating among races or social categories. In a nation with a development resistant culture, the fellow being is ‘my family and my friends.’ In fact, there is a famous phrase from Latin American literature that illustrates this concept well: “whatever for my friends, law enforcement on my enemies.” This interpretation of the fellow man concept ends up generating a double moral standard: one for family and friends, and another for society. This analysis is similar to the ‘radius of trust’ mentioned by Francis Fukuyama and other authors. 2. Work. In traditional societies work is defined as a punishment, very much based on the Genesis text. In progressive societies work is rather a creative outlet for someone who is building their future. 3. Truth. In developed countries truth is something to be discovered, hence the need to support science and technological advances. In these societies constructive criticism, dissent and dialog are welcomed as they help people to find the truth. On the other hand, in underdeveloped nations truth is revealed by a superior authority and any criticism is deemed destructive. Those who see it a different way are heretics.

These concepts and our attitude towards them are a helpful tool to assess what kind of values are being taught or transmitted at school and what the implications would be

The Peruvian Asparagus Cluster on the relationship between culture and progress in a given country (Ortiz de Zevallos 1997, 40).

Trust and Institutions Latin American countries’ low-trust environments have certain implications for the weakness of their institutions and the inability of companies to cooperate in a given cluster or industrial segment. According to Douglass North (1990), formal and informal rules that make up institutions determine the performance of an economy. Institutions in developed countries have allowed great respect for property rights and have fostered the fulfillment of contracts. They have, therefore, reduced transaction costs and granted long-term stability, allowing for specialization, and investment and economic growth over a considerable period of time. In low-trust environments, institutions tend to be weak and companies end up incurring high functioning costs. World Bank authors Shahid Javed Burki and Guillermo Perry provide evidence of the importance of institutions for economic performance and give some insights about institutional development in Latin America. These authors use five subjective indicators provided by the International Country Risk Guide—published by investment risk service company Political Risk Services—to measure institutional development: the perceived risk of expropriation of property, the perceived degree of contract enforceability, the extent to which there are mechanisms for peaceful dispute-resolution or the perceived degree of the rule of law and order, the perceived quality of public bureaucracies, and the perceived incidence of corruption in government. They constructed a composite index of institutional development from the sum of the scores on the five indicators given to each country. By using a sample of 68 countries, they estimated a positive relationship between this composite index and economic performance in the form of per capita gross domestic product growth rate (Burki and Perry 1998, 16–17). Using the same indicators, Burki and Perry also examine the institutional development situation in Latin America and provide evidence that this region is lagging behind the rest of the world, except for Sub-Saharan Africa. According to them, Latin America has made significant progress in reducing the risk of expropriation and contract repudiation, but has hardly improved in the corruption and bureaucratic-quality areas. Joaquín Vial and José Carlos Orihuela (2003) provide additional evidence on what kind of institutions are most relevant to economic growth. They used a set of indicators from the World Bank’s World Business Environment Survey 1999–2000: rule of law, government effectiveness, corruption control, quality of regulation, freedom of speech and political responsibility, and political stability. By using a total of 52 observations (countries), the authors estimated that rule of law was clearly the most important category to explain economic growth. They go further and do the same kind of analysis using the five types of institutions that support markets as defined by Dany Rodrik (2000): property rights, regulatory institutions, macroeconomic stability institutions, social protection institutions, and conflict resolution. Property rights are the most relevant for supporting the economic growth process, followed by social protection and macroeconomic stability institutions. To assess the institutional capacity of the Andean countries (Bolivia, Colombia, Ecuador, Peru, and Venezuela) in these same five categories, Vial

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Cross-Cultural Perspectives on Knowledge Management and Orihuela used the World Bank’s and the World Economic Forum’s data for 2001– 2002 and an index of rule of law. They conclude that institutions in the five Andean countries are particularly weak, no better than the average Latin American institutional performance. Only regulatory and macroeconomic stability institutions seem to have made some progress. Property rights, social protection, and conflict resolution institutions are the weakest, and the limited rule of law is still a concern. More recently, the 2005 survey conducted by Corporación Latinobarómetro in 18 Latin American countries reports that 78 percent of Latin Americans do not believe that their co-nationals obey the law. Rule of law is a problem in the region and is rated with a score of 5.1 where 1 means “the government cannot enforce any law” and 10 means “the government manages to enforce all laws.” Public institutions’ performance is rated as good or very good by only 19 percent of the Latin American population. A majority (66 percent) of the region’s population do not trust the judiciary and only 30 percent think that there has been progress in the fight against corruption. Moreover, 68 percent of Latin Americans perceive that civil servants are corrupt. At the country level, Bolivia, Ecuador and Peru score very badly in civic culture (low legitimacy of law, rights and obligations), rule of law, and corruption (Corporación Latinobarómetro 2005, 16–27). Finally, according to the World Economic Forum’s 2005–2006 Global Competitiveness Report, Peru ranks below 85 percent of the 117 countries participating in the survey in the “contracts and law subindex.” This indicator comprises the answers to the following questions in the survey the World Economic Forum conducts among business leaders (Blanke and López-Claros 2004, 18): • • • •

Is the judiciary in your country independent from political influences of members of government, citizens, or firms? Are property rights, including over financial assets, clearly defined and well protected by law? Is your government neutral among bidders when deciding among public contracts? Does organized crime impose significant costs on business?

More specifically, Peru ranks below 94 percent of the countries in the judicial independence variable and below 84 percent in the property rights category (World Economic Forum 2005, 402–3), in spite of macroeconomic stability, signaling that there is still a long way to go to improve and strengthen institutions and law compliance. The lack of trust in Peru stems from similar roots that explain low levels of trust in other Latin American countries. However, additional anthropological and historical factors specific to Peru can help explain such a lack of social capital in this society.

Reciprocity in Ancient Peru The roots of Peru’s low trust have been studied not only under the light of its Latin heritage but have also been traced back to the historical clash of cultures and the loss of traditional Andean values such as hard work and reciprocity. The Incas built a social and economic system based on reciprocity. No currency existed and work was organized in a cooperative way. Along with the exchange of goods, labor was exchanged for labor. Individuals had to devote some work for the community and the governing and religious class. The system redistributed goods according to people’s

The Peruvian Asparagus Cluster needs. Reciprocity was such a rooted and extended way of life in Inca times that there was no expression to mean gratefulness in the Quechua (Inca) language. After the Spanish conquest, to say “Thank you” Quechua speakers adopted the mixed Spanish-Quechua expression “Dios pagarasunki,” meaning “God will pay you.” Such a cooperative system was backed by three simple but powerful principles or commandments: “You shall not be lazy,” “you shall not be a liar,” and “you shall not be a thief.” The Spanish conquest somehow integrated what is Latin America today with Western civilizations, but superimposed the sixteenth century Hispanic culture over the Inca value system, with a strong emphasis on individualism, servility, and mercantilism—the predominant mode of wealth creation at that time—in social and economic life. Reciprocity was replaced by authority and although some sense of community still remains in today’s Indian farmer communities, that spirit has faded significantly. We cannot blame the Spanish conquerors and colonizers for most problems in Latin America nowadays, but many of the features of a progress resistant value system prevalent in today’s Peru seem to date from the time when the Inca culture was replaced by the conquerors’ set of values. And this was further exacerbated by domination of the native population by the ruling class. Following three centuries of Spanish colonization, Peru had considerable immigration from Europe and Asia in the nineteenth and twentieth centuries which brought new entrepreneurial abilities and made Peru a very diverse country from a cultural and racial point of view. However, since the needs of the majority of the Indian population—of Inca and other ethnic groups—were often neglected, and Indians did not participate in public life, mistrust has long been a barrier against effective social interaction and inclusion. So far several issues have been discussed in trying to describe and explain the lack of trust in Latin America and Peru: values, culture, institutions, and historical roots. Given that cultural values are so rooted in societies and that they condition social behavior and economic performance, are we doomed to suffer forever from the problems derived from low levels of social capital? If cooperation is such an important factor for clusters to bloom and become more competitive nowadays, can we find ways to promote cooperation in Latin American countries, and particularly Peru? The next section provides the background to address this issue.

COOPERATION IN A LOW-TRUST ENVIRONMENT: A THEORETICAL FRAMEWORK This section addresses some theoretical issues about the basis of cooperation. On the one hand, game theory, and specifically the Prisoner’s Dilemma, provides elements that can shed some light on whether cooperation can be built in a noncooperative population. Evolutionary biology, on the other hand, brings another interesting perspective on the origin of cooperation. It traces our human social nature to our instincts, which to most people are animal-related issues. For Matt Ridley, a renowned proponent of this theory, our minds have been built by selfish genes, and yet they have also been built to be social and cooperative. According to Ridley (1996) society was not invented by reasoning men but is a product of our genes much as our bodies are. And it is in our brains that we find the instincts to create and exploit social bonds. Finally, a third perspective is brought by mental models, a tool that helps understand the way people see the world and explains how these models shape behavior.

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Game Theory Game theory, developed by economists, was started by John von Neumann and Oskar Morgenstern in 1944, to analyze interactions between agents guided by a set of rules stipulating the possible moves for each agent and a set of outcomes for each possible combination of moves. This is how a game is defined. Since this definition of game applies to most social phenomena, game theory has been widely used by social scientists, and also by biologists. For a given game, game theory tries to identify the rules in order to define what actions are allowed at any time. Then it finds out how people select an action from those that are permitted. Game theory’s assumptions are (Hargreaves Heap and Varoufakis 2004, 7–32): •

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Individual action is instrumentally rational. Individuals who are instrumentally rational have preferences over several things, and are considered rational because they choose actions which will best satisfy those preferences. There is common knowledge of rationality by all players. It is assumed that an agent plays games with other agents who are instrumentally rational too so it makes sense to model that opponent as instrumentally rational. Common priors. Rational agents will draw the same inferences on how a game is to be played, that is, no instrumentally rational person can expect another similarly rational person who has the same information to develop different thought processes. Individuals know all the possible actions and how the actions combine to yield particular payoffs for each player. An individual’s motive for choosing a particular action is strictly independent of the rules of the game which structure the opportunities for action.

The Prisoner’s Dilemma The game that popularized game theory is the Prisoner’s Dilemma, devised by Cerril Flood and Melvin Dresher of the RAND Corporation in 1950 and formalized by Albert Tucker a few months later (Axelrod 1986; Hargreaves Heap and Varoufakis 2004). This game shows how what is individually rational and optimal can lead to a collectively selfdefeating result. That is, each agent is pursuing his best option and yet participants get less than they would have got, had they cooperated between them. This paradox, which portrays many real social phenomena where the collective result is less than desired, seems to have caused the fascination for the Prisoner’s Dilemma. The Prisoner’s Dilemma anecdote goes as follows. Two people are caught by the police for doing robbery and placed in separate cells. The police officer does not have hard evidence to prosecute them but knows they are the culprits. So the District Attorney poses the following conditions to each of them separately: • • • •

If both of them confess, they will be sentenced to three years’ imprisonment. Given that evidence is insufficient, if both prisoners deny the charge, both of them will be set free. If one prisoner denies the charge, but the other one confesses, the former will be sentenced to five years’ imprisonment as an exemplary punishment. In the reverse situation, if the former prisoner confesses and the other one denies the charge, the former will get a suspended sentence on grounds of his assistance and will additionally be rewarded with the alcohol license he had requested earlier.

The Peruvian Asparagus Cluster Both accomplices are trapped in a dilemma. Given that we are assuming that each individual is instrumentally rational, he will be pursuing what is best for him. Although both accomplices would be better off denying—that is, cooperating—neither will do so, since each can separately get a higher payoff by confessing. If one confesses and the other denies, the former will walk free with the alcohol license. Even if the other confesses, the former is better off confessing too, since if he denies, he gets a worse sentence. Whatever the other prisoner decides, he is better off confessing. So the certain outcome is that both accomplices will confess and will get a three year sentence. Even if both prisoners communicated with each other and agreed to deny, it is still rational not to fulfill such an agreement, since the final decision to confess will render a higher payoff. The Prisoner’s Dilemma is based on two assumptions. One is the order of the payoffs, as stated in the anecdote above. The other is that the payoff for cooperating must be greater than the average of the sucker’s payoff (what the denying prisoner gets when the other prisoner confesses) and the temptation’s payoff (what the confessing accomplice gets when the other one denies). The Prisoner’s Dilemma provides a framework to analyze interaction in a moral vacuum without any ethical imperative, making additional assumptions unnecessary, and using pure logic. This, in turn, allows us to examine how cooperation can come about when it is not based on concern for others or for a group’s well-being, without the intervention of a central authority. In the 1960s mathematicians worked hard to contest the rationally strong lesson of the Prisoner’s Dilemma: that the only rational approach was to defect. Many experiments were conducted. Surprisingly, they showed that in one-shot versions of the game, people cooperated much more than game theory may lead one to expect. People chose to cooperate 30–70 percent of the time. Pre-play discussion also produced cooperative moves. Additionally, experiments suggested that cooperation was likely to be highest when it was expected to be reciprocated (Hargreaves Heap and Varoufakis 2004, 181–83).

Reciprocity and Cooperation: Axelrod’s Theory of Cooperation Robert Axelrod (1986) set up a tournament to explore the fundamentals of cooperation. It involved 14 computer programs playing the Prisoner’s Dilemma 200 times. Each program played against the other contestants, against itself and against a random program. The tournament was played five times. The winner was Anatol Rapoport’s Tit-for-Tat, the simplest program, which starts with a cooperative move and then does whatever the opponent did in the last move. A second round of the tournament took place with 62 participating programs. The rules were basically the same but this time the sequence followed by any two opponents had a random end. Surprisingly the winner of this round was again Anatol Rapoport’s Tit-for-Tat. Moreover, Tit-for-Tat additionally won a series of hypothetical tournaments based on computer algorithms and successfully passed the test of a survival-of-the-fittest contest: a simulation of a tournament’s future generations. According to Axelrod, Tit-for-Tat is robust because it is nice, retaliatory, forgiving, and clear (1986, 60). Tit-for-Tat shows itself as cooperative by cooperating first, and

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Cross-Cultural Perspectives on Knowledge Management manages to enforce cooperation by threatening to punish a contestant who defects on cooperation by defecting until that person cooperates again. This way Tit-for-Tat smartly faces free riders or too exploitative strategies. By being forgiving, it restores mutual cooperation (if the opponent has defected and wants Tit-for-Tat to cooperate again, he or she only has to cooperate). Its clarity makes it easy to recognize, fostering long-term cooperation. However, Axelrod himself admitted that Tit-for-Tat was not always the optimal strategy to play interactive Prisoner’s Dilemma. He actually warned about the danger of defection “reverberation” if Tit-for-Tat was confronted with too nasty strategies. As Tit-for-Tat responds to defection with defection, an endless series of mutual recriminations could be the result of such a confrontation. This, in turn, has been seen in long-standing international religious-ethnic-territorial conflicts. Thus, Axelrod recommends analysis of strategies similar to Tit-for-Tat, but which would be able to prevent the danger of defection “reverberation.” Tit-for-Tat states the case in favor of cooperation in a non-zero sum world, which is actually the way many real life situations work. In a non-zero sum world—unlike chess or most sports—there is no need to get more than the other player in order to attain good results. In a long and repetitive version of the Prisoner’s Dilemma, the success of the opponent is virtually a condition for one’s own success. In the Prisoner’s Dilemma, what makes cooperation possible is the fact that players can meet again. That means that choices made today not only determine the result of this move, but can influence future moves. Thus, the future projects a shadow over the present, and can influence the actual strategic situation. This continuous interaction is what makes reciprocity-based cooperation stable. The main condition for Tit-for-Tat to work is a stable and repetitive relationship. It is a Nash equilibrium when the Prisoner’s Dilemma is repeated indefinitely and the chance of the game being repeated in any round now and in the future is sufficiently high (Hargreaves Heap and Varoufakis 2004, 192). A Nash equilibrium occurs when each player’s strategy is an optimal response to the strategies adopted by other players, and nobody has an incentive to deviate from their chosen strategy. For Axelrod, the real foundation of cooperation is not trust, but a lasting relationship over time. Individuals can come to cooperate by finding the most prosperous strategies. Trust conditions are not as important as the suitability of conditions for the construction of a stable norm of mutual cooperation. Moreover, it seemed to Axelrod that even rationality was not needed for cooperation to arise as the evolutionary process would allow successful strategies to prosper. Nor was a central authority necessary to enforce cooperation. Again, all that was needed for effective strategies to produce cooperation even from the selfish is that they are based on reciprocity. Axelrod brings additional hope by stating that in a noncooperative population, cooperation can evolve from a small clustered group of individuals whose cooperative practice is based on the principle of reciprocity, as long as a proportion of their interactions happen with members of the same group. Axelrod’s work has been criticized for drawing general conclusions extrapolated from computer simulations. Some argue that specific conditions could be designed for Tit-for-Tat not to do well and that it would seem impossible to model a world where nice and nasty strategies coexisted. But some of his propositions have illustrations in real life. For example, Axelrod analyzes the behavior at the Western Front in the First World War. Since combatants were involved in a long battle over the same ground, encounters between the two units were repeated over time.

The Peruvian Asparagus Cluster As it happens when the Prisoner’s Dilemma is played indefinitely, repetition allowed for cooperation to replace hostility, and a reciprocal “live-and-let-live” norm developed. Truces were established between Allied and German units, which were also policed by revenge, resembling the Tit-for-Tat strategy of providing cooperation but responding to defection with defection. Axelrod also explains that at the beginning of the new United States republic, congressmen were known for their double-standard and treacherous way of behavior. Through the years, however, cooperative norms based on reciprocity appeared and became established among members of Congress, and have proved quite stable. This is used as evidence of how a nice strategy can positively “invade” a noncooperative community or population, and once established, it will resist nasty strategies.

Human Instincts and Cooperation Matt Ridley acknowledges that Axelrod proved that the hard lesson from the Prisoner’s Dilemma—that the only result was to defect—could be challenged when introducing the time variable or “the shadow of the future,” and thus ‘nice’ strategies could be dominant. He also recognizes that Axelrod turned the Prisoner’s Dilemma from a zerosum game to a non-zero sum game, more like real life situations. Ridley goes further in asserting that reciprocity in society is an inevitable part of our instincts. Accordingly, we do not actually need to be taught to reciprocate, as it simply develops within us and we naturally know that we can get more from social living than from being alone. Ridley advocates the social nature of human beings. According to him, we are unable to live without each other. We are far more dependent on other members of our species than any other animal. Thus, we have social instincts and predispositions to learn how to cooperate, to discriminate the trustworthy from the treacherous, to commit ourselves to be trustworthy, to earn good reputations, to exchange goods and information, and to divide labor. Our social instincts have enabled us to reap unimaginable benefits from the division of labor for our genes. Our instinctive cooperativeness is the very hallmark of humanity that has set us apart from other animals (Ridley 1996, 249). The best recipe for cooperation is social and material exchange between equals. This is the raw material of trust, and trust is the foundation of virtue, defined as pro-social behavior. Ridley puts it very simply—it is in our nature to be cooperative and trust others— questioning the basic assumption of pure selfishness on which some economic analyses and game theory are based.

Mental Models: The Underlying Variable A third approach for analysis is provided by the mental models component of Fairbanks and Lindsay’s Action Framework (1997). Michael Fairbanks and Stace Lindsay, founders of the Monitor Company’s Country Competitiveness Practice, advised the government and the private sector in four Andean countries (Bolivia, Colombia, Peru, and Venezuela) in the early 1990s. As part of their activities in Peru, they studied the agricultural industry, including the asparagus producing and exporting companies.

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Cross-Cultural Perspectives on Knowledge Management In analyzing the countries’ strategies for prosperity in Latin America, Fairbanks and Lindsay found seven patterns of uncompetitive behavior at the microeconomic level: 1. 2. 3. 4. 5. 6. 7.

Over-dependence on basic factors of advantage (natural resources and cheap labor) Poor understanding of customers Lack of knowledge of competitor activities Failure to forward integrate Poor inter-firm cooperation Defensiveness in government, the private sector, the unions, and the media A paternalistic relationship between government and the private sector

An interesting analytical tool they used was the Action Framework, applied to assess in a systemic and dynamic way the competitiveness of a country, both from the government’s and the private sector’s perspectives. It is also a useful innovative tool to help build consensus between public and private sectors in trying to envision a common shared future and in working on how to attain that vision. As the Action Framework allows constant review of its categories or components, it is also a powerful instrument for learning. It begins by stating what are the results (actual if analyzing the present; targeted if envisioning the future); then what strategic actions are needed to attain them; what steering mechanisms (organizational structures and policies) allow those actions; what paradigm and framework (mental models) are behind them; and what context conditions all previous elements. Results, strategic actions, and steering mechanisms are the visible part of competitiveness and usually the focus of policy-makers and strategists. When results are not satisfactory, actions and strategies are changed (react) or institutions and structures modified (redesign). The invisible part of competitiveness is the mental models which consist of paradigms and frames of reference. Paradigms are systemic ways in which individuals or institutions think about the world. According to Fairbanks and Lindsay, the predominant paradigm governing Latin American economies has been a vision of wealth creation through comparative advantages such as natural resource endowment. Frames of reference are beliefs, inferences, and goals through which an individual sees the world. They are concrete, first person, and specific. Frames are informed by the paradigm available to the individual. A common private-sector frame found by Fairbanks and Lindsay in Latin America was the view of government as inconsistent, untrustworthy, and unconcerned with the private sector. On the other hand, a common public-sector frame viewed the private sector as used to state-favoritism and privileges. Certainly, these insights set the groundwork to overcome defensiveness and divisiveness, by reorienting patterns of thought and behavior. Mental models are very useful to find insights on individuals’ motivations, the way they see the world, and their attitudes toward innovation and progress. “The results tend to be a function of the way people think the world works, which informs the way they frame their problems and relationships, which in turn affects the way they act. The way people think—their mental models— … is where the point of leverage for creating lasting change lies” (Fairbanks and Lindsay 1997, 248). A common feature Fairbanks and Lindsay found in most clusters was the lack of cooperation among member firms and their inability to learn from one another. The lack of trust and cooperation seriously limited the capacity of suppliers and client companies to specialize in the development of fundamental industrial inputs, a fact that

The Peruvian Asparagus Cluster finally impaired the ability of the industry to innovate and improve. The Latin American culture of self-sufficiency inhibits the development of interdependent relationships and restrains the capacity of companies to provide innovative answers to competitive challenges. For these authors, changing mental models is possible and powerful, and should be done at the individual and firm levels, trying to understand first which mental models drive strategic decision-making. So far, we have reviewed three approaches that argue that cooperation is possible: 1. Robert Axelrod’s Theory of Cooperation, based on repeated settings of the Prisoner’s Dilemma, provides the argument that cooperation based on reciprocity can increase if players can interact over time. The underlying assumption is mere individual rationality and no moral imperative or concern for others is accounted for. 2. Matt Ridley provides an evolution biology point of view, in which cooperation arises naturally by instinct. 3. Michael Fairbanks and Stace Lindsay’s Action Framework helps us see that our structures, norms, institutions, strategies, and actions are very much determined by the way we see the world, and this is where we can look for underlying factors that allow or deter cooperative behavior.

In the next sections we will look for elements of evidence that may support some insights provided by these three approaches. In particular, some issues are of particular interest: • •

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What made it possible for cooperation to arise in the Peruvian asparagus cluster? Given the traditionally low-trust environment in Peru, is it possible to replicate the asparagus cluster cooperation experience in other clusters? That is, how applicable to the Peruvian situation is Axelrod’s proposition that mutual cooperation can arise in a noncooperative population if their members have contact with a small group of individuals who cooperate or have a nice strategy? What is the role of mental models? Are they changing?

THE PERUVIAN ASPARAGUS CLUSTER This section presents the case study of the asparagus cluster of Peru, a pioneer experience of business success based on the determination and entrepreneurial vision of a group of businessmen to overcome distrust and collectively strengthen the asparagus logistic chain. The section is extensively based on the innovative material produced by Lawrence Prusak, Don Cohen and Alvin Jacobson of Hartwell Associates, consultants to the Competitiveness Program of the Andean Development Corporation (CAF), for the project Knowledge Assets and Social Capital which aimed at applying knowledge management theory and tools to assess and help improve the competitive capabilities of the asparagus cluster in Peru and the cosmetics cluster in Colombia (Hartwell Associates 2004). Most parts of Don Cohen’s case study Frío Aéreo: Shared action, shared knowledge, shared rewards are reproduced here (2003).

Background: The Agricultural Industry Revolution in Peru In the early 1990s Peru’s stabilization program and deep structural reforms ended two decades of macroeconomic instability which prevented a steady flow of private

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Cross-Cultural Perspectives on Knowledge Management investment. Bad economic policy and the results of an ill-fated land reform undertaken in 1968 had impaired production and investment in the agricultural industry. However, the 1990s open market reforms which liberalized the economy had profound effects in this sector. The Economist (2005) reports that “over the past 15 years, the country has added almost 400 different export crops to its traditional staples of coffee, cotton and sugar. Farmland has increased from 1.7 million hectares in 1993 to 2.6 million today, according to the National Statistics Institute. Farm exports totaled US$1.1 billion in 2004, up a third on the previous year … In the Ica area [four hours south of Lima], export agro-industry has created some 40,000 jobs in the past decade.” Apart from economic policies, trade preferences in the European Union and the United States that allow duty-free import of Peruvian goods have helped propel growth of agricultural exports. The star product has been asparagus. Artichokes, olives, citrus fruits, mangoes, avocados, grapes, and paprika are following the same path. Fernando Cillóniz, president of Inform@cción (a strategic information consulting company), who was very much involved in the competitiveness study undertaken by Monitor Company (Michael Fairbanks, Stace Lindsay, and other consultants) in the 1990s, states: “The exporting agricultural business in Peru has dramatically changed in the past 15 years. From being a sluggish sector, it has become internationally hypercompetitive” (personal communication).

Emerging Champions How have members of agricultural industry clusters managed to cooperate in order to compete successfully while operating in a low-trust country environment which poses severe deterrents to progress? Two significant factors can be identified in trying to answer this question. First, the agricultural industry revolution has been undertaken by a new business leadership in Peru. They are part of a new generation of entrepreneurs and business people who have been trained in managerial issues and understand better what is required for competitiveness. Far from adopting the still extant old-fashioned rent-seeking mentality, they have embraced the new competition paradigm. As we will see later with the asparagus cluster, they have shown that some clusters or industrial segments can actually break away from the patterns of uncompetitive behavior found by Fairbanks and Lindsay at the microeconomic level (see mental models discussion above). They do not ask for government subsidies or preferential treatments, but are eager to compete in the international arena provided free competition rules apply. Second, external forces and cultural issues have had their role. Globalization, the information and telecommunication technologies revolution, and the liberalization of world trade have particularly influenced the manner in which this new breed of agricultural business people in Peru are tapping the country’s natural endowments to build competitive advantage by strategically using and sharing knowledge under innovative forms of cooperation. Exposure to international trade rules and trade relationships with developed countries’ firms, based extensively on trust, have spurred the adoption by Peruvian companies of a stricter sense of responsibility and contract fulfillment which otherwise would make them lose valuable business. International trade somehow acts a cross-cultural

The Peruvian Asparagus Cluster force for companies operating in a low-trust environment to enhance trust and values such as responsibility, honesty, reliability, and cooperation. In the case of the asparagus cluster, a third factor related to the first one can be accounted. Asparagus business people are open-minded and naturally eager to learn from other successful international experiences. There are several cross-cultural knowledge management instances present in the asparagus case. First, cluster members managed to jointly set up their refrigerated warehouse in part because they were inspired by the model of an organization—a Dutch farmers’ export cooperative—that proved that competing grower/exporters could cooperate successfully. Second, their members adopted an irrigation system from Israel.

A Star Product One of the earliest successful agribusiness ventures in Peru is the asparagus cluster. Such a delicate and perishable product as fresh asparagus has become the star product of non-traditional Peruvian exports. According to Peru’s Association of Exporters, from 1994 to 2004 fresh asparagus exports increased six-fold. In 2004, 72 percent of the country’s 99,000 tons of exports by air were perishables, and of that 72 percent (or 71,000 tons), 66,000 tons were fresh asparagus (the information sources for perishables and asparagus exports by air are Peru’s Customs Department and Frío Aéreo). Currently Peru is the second largest producer and the top exporter of fresh asparagus in the world. Peru sends approximately 75 percent of its production (mainly green asparagus) to the United States and 22 percent (predominantly white asparagus) to Europe. Peru shares the US asparagus market with Mexico and with producers in the US itself. The perishable nature of fresh asparagus has a high impact on its final cost, with transportation cost accounting for 46 percent of the total cost. How then could Peruvian asparagus companies beat other competitors who are significantly much closer to those consumer markets including their domestic producers? Given the higher transportation costs, Peruvian exporters cannot compete on price: they must therefore compete on quality—delivering consistently fresh, high-quality product to the produce departments of supermarkets in the United States. Peru has special climate conditions that allow the growing of asparagus all year round, which is certainly an advantage over other countries. But the actual breakthrough for this cluster’s success came from joint efforts and the shared knowledge management of a group of business people determined to tackle the main problems they faced in the complex asparagus logistic chain.

The Weakest Link in the Logistic Chain The critical issue for the asparagus industry to become successful was its cooling chain, as Peruvian companies compete on consistent quality and freshness of the product. To that end, the asparagus has to be kept at a temperature close to 2°C and at 98 percent humidity from harvest to the retail sale point. Asparagus maintained at a near-ideal temperature and humidity will remain in prime condition for up to three weeks. With the trip from field to market taking 8–10 days, Peruvian asparagus has a maximum shelf life of just less than two weeks. But handling that exposes the product to higher temperatures, even for a few hours, can reduce shelf life by three days or more,

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Cross-Cultural Perspectives on Knowledge Management increasing the likelihood that some of it will deteriorate at the market and go unsold. In a consignment market this issue has a direct effect on the exporting companies’ profitability. Deteriorating product also potentially degrades the exporter’s reputation for quality and reliability. So the cooling chain is a critical element of asparagus quality and of the long-term success of the Peruvian asparagus industry. Until 1998, the weakest link in that chain was at Lima airport, where field deliveries were loaded on pallets in the open air and typically waited on the tarmac for four hours before being loaded onto planes. Some of the produce was partly protected from the heat by thermal blankets, but even so, its temperature often rose to 8° C or higher, well above the optimal range.

Getting from Idea to Commitment and Construction More than 12 years ago, a few farsighted members of ADEX (the Exporters Association of Peru) including Jorge Checa, then general manager of Exfrusur, and José Letts of Roots Peru, recognized the value of fixing this weak link in the cooling chain. They began to promote the idea of asparagus exporters banding together to build a refrigerated facility at the airport. Roots Peru and Flores Esmeralda already had their own cooling rooms near the tarmac, but the idea of a joint enterprise among rival exporters was new. Cooperative action would make it possible to construct a facility that no single small or medium-sized exporter could individually afford. “This is an obstacle that can only be overcome together,” Checa told his fellow exporters (Cohen 2003, 3). The example of CEBECO, a cooperative of Dutch farmers who had successfully combined their supply and marketing efforts, showed that this kind of collaboration among competitors was possible. This strong entrepreneurial vision, for which CEBECO was a source of inspiration, is represented at the beginning of the “S” curve in Figure 11.1 whose x-axis sets the timeline for the Frío Aéreo endeavor. But winning the agreement and support of enough exporters to fund the project was not easy. Many were skeptical about the feasibility of the project and the possibility of cooperation. Some exporters insisted that no problem existed, that their use of thermal blankets to insulate pallets of asparagus at the airport was sufficient protection from the heat. Given this lack of belief and lack of trust, Checa and his company decided to work with an airline—Challenge Air Cargo—to create an airport refrigeration facility that Exfrusur could use. That transport company backed away from a possible deal, however, when they saw an opportunity to buy an inexpensive cooler from a bankrupt Chilean company on their own. When that plan failed, Checa and his colleagues renewed talks with other exporters while carrying on an extended conversation with the commercial managers of the airport. “That is where the miracle really happened,” Checa says, but it did not happen right away. He adds, “The commercial managers said, ‘yes, yes,’ but nothing happened” (Cohen 2003, 4). In fact, inconclusive negotiations with airport management went on for two years. The breakthrough came when Checa and Letts asked Mr. Pendavis, the president of ADEX, to call Peru’s Minister of Agriculture. He in turn called the president of the airport authority to stress the importance of the refrigerated warehouse project, known as Frío Aéreo. That call led to an appointment with the president the next day, and soon to an agreement granting permission to a partnership of asparagus exporting

The Peruvian Asparagus Cluster Figure 11.1 The road to Frío Aéreo.

companies to build a refrigerated warehouse at the airport. With this assurance demonstrating the practical reality of the project, two formerly reluctant exporters agreed to help finance the $1 million facility. Soon two other companies joined as well. That critical mass attracted others, creating a group of 10 producers committed to the project. This long saga of early stops and starts, disappointments and delays, illustrates some key points. One, clearly, is the importance of persistence by a few strong leaders who maintain faith in a goal they value. The process of convincing competitors to do something new together necessarily entails overcoming distrust and modifying accepted beliefs and long-established practices. Few of the benefits were foreseen by the exporters at the beginning, and many doubted that the project could succeed at all. Some thought that cooperation among competitors was not possible; some believed that airport authorities would never permit the proposed facility to be built there. Also, potential partners were at different stages of maturity in what was still a young industry; new companies that had just completed their first plantings of asparagus were not ready to give much attention to product handling at the airport. Only repeated conversation over time can build the necessary trust and convince potential participants of the value of unfamiliar ideas (especially the idea of competitors cooperating). Flexibility—in effect an element of persistence—is important too. The willingness to look for a new way when one path proves to be a dead end kept the project alive. The story also critically demonstrates the importance of social and professional ties. Without the involvement of ADEX, that organization’s relationship with the Minister of Agriculture, and his influential connection to the president of the airport authority,

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Cross-Cultural Perspectives on Knowledge Management permission to build the refrigerated facility at the airport might never have been granted. Finally, the relative rapidity with which the 10 partners joined together after years of little or no progress demonstrates the dynamics of the “tipping point.” That concept, borrowed from epidemiology, suggests that movement toward innovation is often not a gradual progression but a sudden breakthrough at the moment when the preponderance of barriers to change gives way to a preponderance of forces in its favor. In the case of Frío Aéreo, that tipping point came when the airport president’s agreement led the first few producers to join the project and their commitment quickly brought others along. This is represented on Figure 11.1 at the turning point of the “S” curve, a point from which the flow of events for Frío Aéreo to become reality accelerated. Agreeing to build a shared refrigerated warehouse at the airport does not automatically lead to unanimous agreement about its design and construction. After Frío Aéreo was founded in January 1997, the partners found themselves involved in negotiations over details of the proposal. These lengthy and not always fruitful discussions convinced them that the organization needed to hire an independent manager, one not linked to any particular member company, to help the group achieve consensus and to supervise the operation of the facility once it was built. Fernando Cillóniz, manager of Fundación Perú (created to foster agricultural development), served as coordinator while the partners looked for a permanent manager. Cillóniz brought in an outside expert on cooling equipment and warehouses to design a layout all of the partners could agree on. Construction of the facility began in August 1997. In December, Alvaro Salas was hired as Frío Aéreo’s first manager. Salas was responsible for solving operational problems, but he said that a full 30 percent of his time was spent listening to the partners, hearing their ideas and stories of their experiences, and looking for the points of agreement and mutual understanding that could become the basis of cooperative action. As part of this important role as a link or bridge between partners, he also tried to be a buffer or peacemaker, downplaying or defusing destructive comments and disputes. The main aim of these efforts was to increase trust within the group. He considered building trust among the partners his most important task because, he said, trust is essential to coordination. The need for trust throughout the organization led him to hire—not the cheapest possible labor—but employees whose reliability and commitment he could depend on. Salas also shared the positive approach of Checa and the other Frío Aéreo pioneers. “Creativity,” he says, “is thinking that nothing is impossible, so you start to look for real solutions instead of giving up” (Cohen 2003, 5).

Reward for Virtue The facility began operating in 1998 and was filled to capacity from the beginning. Eight million kilos of asparagus passed through it that first year. In 2002, the same facility handled 40 million kilos, the increase possible in part because of greater efficiency in loading practices. After five years of operation, Frío Aéreo reduced the typical time needed to load asparagus on planes from four hours to one hour and 20 minutes. The typical temperature range of the product went from 2°–8°C or higher to 2°–4°, a reduction that directly and significantly improves quality. So the cooperative organization has clearly achieved its initial goal of improving the cooling chain.

The Peruvian Asparagus Cluster

Making Knowledge Visible The availability of a refrigerated warehouse is of course instrumental in this improvement in temperature management, but improvements reflect better work practices as well as better facilities. The dramatic reduction in loading time, for instance, cannot be directly attributed to the warehouse itself, although another Frío Aéreo service—providing standard boxes to all exporters—contributes to that efficiency. A significant part of the success of the Frío Aéreo partnership has come from defining, measuring, and sharing practices that speed and improve handling of the perishable product. In other words, the partnership has been a knowledge partnership as well as one of shared facilities. In fact, its greatest value (and that of other collaborations) may ultimately derive more from the shared knowledge resources that have fostered process improvement than from pooled investment in infrastructure or influence. At Frío Aéreo, knowledge sharing has been systematically pursued. What makes knowledge sharing and process improvement work is frequent and regular collection and distribution of detailed information about the asparagus exports: product quality, temperature change during “palletization” and loading, and time needed to load the produce. These statistics record the effects of process knowledge rather than the knowledge itself, with consistently superior results demonstrating superior knowledge of how to do the work well. These careful and comprehensive measurements are the foundation of knowledge collaboration. Knowledge management experience in many settings has shown that trying to quantify productive knowledge directly is virtually impossible, but charting the positive outcomes that knowledge generates is both possible and useful because it shows where productive knowledge resides and which practices deserve to be widely adopted. Alvaro Salas rightly defined Frío Aéreo as a “glass house,” as knowledge was always made visible (see top right hand corner of Figure 11.1). Frío Aéreo management sends each partner company daily information on product received at the facility, reports on the volume of asparagus exported to principal markets three times a week, and distributes rankings of temperature and quality twice a month—reports that compare all of the companies on quality, speed, and temperature. The quality reports each partner receives blank out the names of all the others, so that each recipient sees his rank and detailed information on quality without knowing which of the other companies occupy the other lines on the reports. For partners that score significantly below the others, the reports show, first and most importantly, that the work can be done more effectively and efficiently. This objective proof of superior performance helps overcome a principal barrier to convincing experienced professionals to adopt new practices—that is, the belief that they are already doing the right thing and that their current results are the best that anyone can expect. Knowledge management experience in a range of settings has shown that clear evidence of better performance helps motivate adoption of best practices. Frío Aéreo’s rankings of export airlines in terms of the amount of time they needed to get their planes in the air once the cargo is released by the warehouse show the slower performers that improvement is possible. A healthy competition among airline employees has significantly reduced average handling time. This sharing of techniques may look like giving away trade secrets responsible for a competitive advantage and therefore seem ill-advised or inexplicable, but in fact the

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Cross-Cultural Perspectives on Knowledge Management overall improvement in quality and efficiency benefits the entire industry. Although the same exporters tend to remain at the top of the quality rankings, all of the partners learn from one another. Improved quality and efficiency can increase the profitability of all the partners’ businesses, and the exporters’ collective improvements help them compete more effectively with Mexican, US, and European producers. By collaborating to improve the international reputation of Peruvian asparagus in general (rather than their individual brands), the partners have all gained.

Working to Strengthen Sustainable Competitive Advantage Sharing premises and good practices of sharing knowledge at Frío Aéreo support a successful strategy which has three components: set up a quality standard (e.g., standardized packaging to boost efficiency); deliver accurate projections of production and exports; and promote consumption of the product, a task in the hands of the Peruvian Asparagus Institute (IPEH) with the assistance of Frío Aéreo. Economies of scale (savings from the joint purchase of raw materials and goods and from negotiating joint contracts for air freight and other services) have begun to reduce costs, making the product even more competitive and freeing up funds for these development efforts. The collective care to prevent asparagus shipments from being used to smuggle drugs has made Frío Aéreo the first Peruvian company to receive certification from the U.S. government that exempts it from time-consuming drug searches on arrival in the United States. It is also working with the University of California at Davis to develop a new fumigant that will increase shelf life of the product and reduce environmental damage.

Managing Growth In 2003, a new facility, 75 percent larger than the original 9,300 square foot warehouse was built, and since then 20 additional exporters have joined the cooperative. The 30 members of Frío Aéreo account for 85 percent of all Peruvian asparagus exports. In 2004 Frío Aéreo handled 60 million kilos of perishables. This cooperative has helped fresh asparagus export value increase at a compound growth rate of over 23 percent per annum since it started operations. Most of Frío Aéreo’s members export only asparagus, but some ship other perishables as well, including flowers, figs, mangoes, peas, beans, and other fruits and vegetables which Frío Aéreo is already catering to. The expanded organization will have the size and financial resources to develop new programs for research, promotion, and export, and to extend the richness and reach of its knowledge sharing. A larger partnership can bring problems as well as benefits, however. Expansion to 30 partners, most of whom have not shared the learning and trust-building experience of the first five years, has the potential to undermine the group’s focus, vision, and the ability to act. The 10 “pioneer” partners have spent years developing trust and understanding; they share the satisfaction of turning a visionary idea into a successful reality. The new members do not have this communal history. Even among the 10 original members, of course, consensus has not always been easy to come by. Conflicts of interest, perceived or real, can make unanimity impossible.

The Peruvian Asparagus Cluster Anticipating these problems and hoping to reduce them, Frío Aéreo offered “B share” memberships that allow new members to use the facility and take part in knowledgesharing but not vote on decisions regarding future action and direction, and “A share” memberships that include voting rights. They also moved from requiring unanimous agreement on decisions to a more manageable majority rule. The two-tier system makes it possible to increase the scope and resources of Frío Aéreo without overwhelming the core group with a flood of newcomers who might change the organization before they fully understand it. Organizations are living organisms that can be affected in unexpected ways by even small changes. Even with the safeguard of A and B share memberships, expansion will probably have unanticipated effects. They will have to be monitored and managed to make sure that the spirit and the principles of Frío Aéreo survive. Change is not always for the worse, of course. The influx of new members brings new energy and innovative ideas to Frío Aéreo. Small, cohesive groups face the potential problem of becoming set in their ways and tired or complacent. Checa recognizes this danger, saying, “We were too happy with what we achieved. We did not want any more in the group. We were very comfortable among ourselves” (Cohen 2003, 10). New blood is an important source of continued vitality and creativity, and no closed organization can maintain its strength (or its access to new knowledge) for long. To maintain a balance between faithfulness to its original vision and openness to new possibilities, the Frío Aéreo partners should make certain to tell their story to the newcomers while listening to the stories of their needs and goals. Any new organization that grows and matures faces this combination of pitfalls and possibilities. Moving successfully from the pioneering stage to become a larger, established entity is not easy but promises important gains. Frío Aéreo is in the early stages of that transition, with a history of success and creative choices to help it on its way. The past seven years have proved the value of this cooperative cluster; the next seven should show what it has the potential to become.

Building Trust: Essential for Success The development of Frío Aéreo from an idea to a functioning organization to a successful and growing enterprise has been an eventful 12-year process that illustrates many of the resources and approaches needed to create a cooperative organization. Some of the details and circumstances described here may be unique to the Frío Aéreo experience, but the story calls attention to factors that are likely to be important in other collaborative efforts. Achieving any effective and lasting cooperative partnership requires: • • •

•

Committed and visionary leadership Time and effort to develop trust and mutual understanding among potential partners Having and using social networks—existing relationships—to provide knowledge, assistance, and connections with influential agencies and organizations (these relationships are not used here for lobbying to get preferential treatment or privileges from government, but to solve problems and overcome barriers to business development in a transparent and honest way) An independent coordinator or manager to work with partner organizations to aid communication and trust building

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Making best practices (and therefore superior knowledge) visible through regular measurement of results Encouraging conversation and observation to share knowledge and practices As the cooperative matures and grows, developing an explicit strategy for expansion and change that will preserve the basic principles, practices, and spirit of the organization and build trust relationships with the newcomers

It is not an accident that several of these items mention trust. Of all of the contributors to Frío Aéreo’s success, the long and continuing person-to-person process of trust building is probably the most important. Distrust would eventually destroy any cooperative venture; trust holds it together.

SHARING THE BASIS FOR SUCCESS Frío Aéreo illustrates both the potential rewards of cooperation and the kinds of efforts needed to make cooperative action possible. As Don Cohen and Larry Prusak point out, the best social capital investment business leaders can make is to build and maintain trust (Cohen and Prusak 2001, 45). Frío Aéreo’s social capital payoff is the hallmark of a revolution in the Peruvian exporting agribusiness industry based on trust and shared knowledge management and the emergence of a new paradigm where joint action is possible in spite of a tradition of low trust and a cynical attitude against united efforts. Mental models, therefore, are changing. The asparagus cluster’s success based on trust and cooperation and its “contagion” to the rest of the agricultural industry in Peru seem to set the case in favor of Robert Axelrod’s proposition that a small cluster of individuals who have an efficient nice cooperative strategy can actually ‘invade’ a noncooperative population, as long as the members of the cluster have a minimum degree of interaction over time. And that brings hope that at least in this industry, conditioned by the international trade rules—very much based on trust—coordinated efforts towards enhanced competitiveness are possible, setting the foundations for the adoption of certain values of a progress-prone value system: more cooperation and trust. An additional element that reinforces the prospects of success in the agricultural industry of Peru is that it encompasses labor intensive activities. With high unemployment levels in the economy, this industry is deemed to help solve an important issue not properly addressed by recent governments. Matt Ridley is certainly right to say that we human beings are social animals, and it is instinctive for us to cooperate. But the Frío Aéreo case also shows that it takes time and repeated efforts to make people cooperate, as Axelrod worked in conditioning the surge of cooperation to the “shadow of the future.” For a country such as Peru, the challenge is to arouse people’s instinctive cooperativeness in a reasonably short period of time, and have cooperation and trust rooted in social behavior, to reinforce the role of clusters in building sustainable competitive advantage and in spurring innovation, and to strengthen the ability of companies to compete in the global economy. Government certainly has a role in shortening such a period of time: by building institutions and enforcing rule of law, by fostering science and technology development for business innovation, and by supporting collective or joint efforts such as the Frío Aéreo endeavor. For that, along with the business community’s change of mental model, must come the government’s understanding of the foundations and sources of competitiveness and its

The Peruvian Asparagus Cluster adoption of this new paradigm. And both mental models should be aligned. Success stories can certainly inspire others to go in that direction.

REFERENCES Axelrod, R. 1986. La evolución de la cooperación. El dilema del prisionero y teoría de juegos. Madrid: Alianza Editorial. Blanke, J., and López-Claros, A. 2004. The Growth Competitiveness Index: Assessing countries’ potential for sustained economic growth. In World Economic Forum Global Competitiveness Report 2004–2005, chapter 1.1, 3–18. Burki, S. J., and Perry, G. E. 1998. Beyond the Washington consensus: Institutions matter. Washington, DC: The World Bank. Cohen, D. 2003. Frío Aéreo: Shared action, shared knowledge, shared rewards. Working paper, Hartwell Associates and Corporación Andina de Fomento. Cohen, D, and Prusak, L. 2001. In good company: How social capital makes organizations work. Boston: Harvard Business School Press. Corporación Latinobarómetro. 2004. Summary-Report. Latinobarómetro. A decade of measurements. Santiago, Chile: Corporación Latinobarómetro. Corporación Latinobarómetro. 2005. Informe Latinobarómetro 1995–2005. Santiago, Chile: Corporación Latinobarómetro. The Economist. 2005. Peru: Blooming desert: An agricultural revolution. July 7, sec. World, Latin America, 32. Fairbanks, M., and Lindsay, S. 1997. Plowing the sea: Nurturing the hidden sources of growth in the developing world. Boston: Harvard Business School Press. Fukuyama, F. 1995. Trust: The social virtues and the creation of prosperity. New York: Free Press. Grondona, M. 2000. A cultural typology of economic development. In Culture matters. How values shape human progress, ed. L. E. Harrison and S. P. Huntington, 44–55. New York: Basic Books. Hargreaves Heap, S., and Varoufakis, Y. 2004. Game theory. A critical text. London: Routledge. Harrison, L. E., and Huntington, S. P. 2000. Culture matters: How values shape human progress. New York: Basic Books. Hartwell Associates. 2004. Knowledge assets and social capital: Exploring opportunities for increasing the effectiveness of PAC projects. Hartwell Associates and Corporación Andina de Fomento. North, D. 1990. Institutions, institutional change, and economic performance.Cambridge: Cambridge University Press. Ortiz de Zevallos, F. 1997. La economía peruana y sus perspectivas. In II cumbre de la competitividad. El reto de la productividad, ed. Ministerio de Industria, Turismo, Integración y Negociaciones Comerciales Internacionales, 20–40. Lima, Peru: MITINCI. Ridley, M. 1996. The origins of virtue: Human instincts and the evolution of cooperation. London: Penguin. Rodrik, D. 2000. Institutions for high-quality growth: What they are and how to acquire them? Cambridge, MA: National Bureau of Economic Research. Vial, J., and Orihuela, J. C. 2003. Instituciones y crecimiento en los países andinos. New York: Center on Globalization and Sustainable Development, Earth Institute at Columbia University, and Corporación Andina de Fomento. von Neumann, J., and Morgenstern, O. 1944. Theory of games and economic behavior. Princeton, NJ: Princeton University Press. World Economic Forum. 2005. Global Competitiveness Report 2004–2005. www.cdi.org.pe/ Informe_Competitividad_Global.htm.

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12 Research and Development Knowledge Transfer across National Cultures Marjolyn S. W. Thiessen, Paul H. J. Hendriks, and Caroline Essers

ABSTRACT With the increased tendency of multinational corporations (MNCs) to disperse their research and development (R&D) activities over various countries, the integration of the dispersed R&D knowledge via knowledge transfer across cultural borders becomes crucial for understanding and managing MNCs. The chapter describes an investigation of knowledge transfer processes between R&D facilities of Akzo Nobel Car Refinishes (ANCR) in The Netherlands, the United States, and India. It inspects the barriers involved by hypothesizing and testing how specific scores on dimensions of national culture affect particular aspects of knowledge transfer. The main objective of the research is, via the situation of ANCR, to explore the information value and workability of linking culture and knowledge transfer as described previously. The research confirms the notion that cross-cultural knowledge transfer can be and very often is problematic, but it also provides that notion with a more positive outlook. The research shows that cultural differences are not just barriers to knowledge transfer, but may also provide a stimulus to learn from and with others in other cultures. Contrary to what is commonly suggested in the literature, the case study shows that cultural differences increase the difficulties of transferring explicit knowledge but the increase is smaller for those associated with the transfer of tacit knowledge.

INTRODUCTION Ongoing trends of globalization continue to lead organizations to disperse their activities throughout the world. Although, for strategic reasons, R&D was traditionally intimately linked to the home seat of the organization, in recent decades, multinational corporations (MNCs) have also started dispersing their R&D activities due to the

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Cross-Cultural Perspectives on Knowledge Management increasingly international competitive environment (Chiesa and Manzini 1996; Chiesa, Manzini, and Pizzurno 2004). In such situations, the transfer of knowledge among business units becomes a crucial aspect of R&D and business performance. Kogut and Zander (1993) even argue that MNCs only exist because they are efficient vehicles for cross-border knowledge creation and transfer. Therefore, it comes as no surprise that processes of knowledge transfer within MNCs have received much research attention (e.g., Eisenhardt and Santos 2002; Ghoshal, Korine, and Szulanski 1994; Gupta and Govindarajan 2000; Zander and Kogut 1995). Although the process of knowledge transfer among units is far from trivial in one and the same country, difficulties in understanding this process are bound to increase when knowledge is transferred across geographical and cultural borders (Bresman et al. 1999; Ford and Chan, 2003). Consequently, national culture is a crucial facet in research concerning knowledge transfer at multinationals. Although the concepts of MNCs and culture have received ample attention in past decades and much research has been done on the phenomenon of knowledge management (KM), there is little literature on knowledge transfer within MNCs specifically discussing the influence of national culture. Yet due to cultural differences, the transfer of knowledge in an international context can be expected to pose other and probably more severe difficulties than knowledge transfer in a purely domestic organization. A major shortcoming in the current literature is that there is no instrument for assessing differences in national culture with regard to aspects of knowledge transfer and how they influence that process. In the current class of instruments for the measurement of culture, knowledge transfer is absent, and in the models and instruments for studying knowledge transfer, culture at best plays a black-boxed, broad role (e.g., RomanVelazquez 2005). The objective of this research is to provide new insights into how diversity in national cultures affects knowledge transfer in MNCs. This paper describes an investigation of knowledge transfer processes between R&D offices of Akzo Nobel, a Dutch multinational producing a wide range of goods and services in the domains of health care, coatings, and chemicals.1 The study focuses on Akzo Nobel Car Refinishes (ANCR), which has its main R&D facilities in three countries: the Netherlands, the USA, and India. The main objective of this research is to explore how, in the situation of ANCR, the crosscultural transfer of R&D knowledge is affected by the diversity in the national cultures of the parties involved. This chapter presents a dedicated instrument for measuring differences in the knowledge transfer cultures among R&D facilities that are set in different national cultures. It also describes the outcome of using this instrument in the situation of ANCR. This research aims to contribute to the current theory on knowledge transfer within MNCs and explores the practical implications insight based on this theory may have concerning the cross-cultural transfer of knowledge among R&D facilities for MNCs such as Akzo Nobel. The qualitative and explorative character of this study dictates that its conclusion cannot be generalized and is based on assumptions, which require further exploration to be confirmed. This chapter is organized as follows. Firstly, the notions of distributedness of R&D in MNCs, the consequent relevance and challenges of knowledge transfer, and the role of national cultures are explored. Next, the conceptual approach is described for (1) tackling differences in national cultures based on received notions of Hofstede (1980; 2001) and Hampden-Turner and Trompenaars (2000), (2) understanding aspects of

Research and Development Knowledge Transfer across National Cultures knowledge transfer, and (3) perceiving cross-cultural knowledge transfer as indicative of the embracing of national cultures by linking (1) and (2). Subsequently, the case of ANCR and the research methods are presented. The fifth section describes the research outcome. Finally, the last section discusses the main insights this study produced, its limitations, and practical implications.

DISTRIBUTED R&D, KNOWLEDGE TRANSFER, AND NATIONAL CULTURES

Knowledge Transfer in MNCs Globalization trends continue to shape the competitive and operational landscapes of organizations, and in particular those of MNCs. Part of the explanation for this phenomenon is cost-efficiency. However, many authors have emphasized that the reasons for ‘going global’ cannot be fully or satisfactorily explained by considerations of efficiency and transaction costs alone. These authors argue that intangible assets make the difference between success and failure in the international arena (Evans, Pucik, and Barsoux 2002). Such assets will surface in the dynamic organizational capabilities and knowledge presumed in and constituted by these capabilities. Such argumentation, that combines insights of the resource-based view (Penrose 1959) with a knowledge-based view (Eisenhardt and Santos 2002; Grant 1996), put the focus on the organizational value of knowledge. Moving organizational knowledge to the foreground feeds on the recognition of competitive advantage derived from creating, transferring and integrating knowledge throughout the organization. The ability to transfer, recombine, and leverage knowledge across borders is becoming especially significant in this globalizing economy (Bartlett and Ghoshal 2000; Kogut and Zander 1992). The extent of this internationalization differs widely among the functional fields in the MNC. The internationalization of sales, production, and procurement activities occurred rapidly, whereas R&D remained predominantly a domestic activity. In management literature, R&D is “traditionally treated as the last activity to be internationalized” (Chiesa and Manzini 1996, 463). Yet, in the past few decades internationalized R&D has gained tremendously in importance as European, American, and Oceanic MNCs have outsourced their R&D activities to such countries as India and China (Chiesa, Manzini, and Pizzurno 2004), for instance. The reasons for decentralizing R&D units to different countries include a better absorption of local knowledge leading to improved adaptation to local market needs, a shortening of the time-to-market of new products by better coordination and cooperation with local production activities, the regional availability of specific skills, and the low wage costs of R&D specialists in such countries as India and China (Chiesa and Manzini 1996; Chiesa, Manzini, and Pizzurno 2004). Also, starting R&D facilities in other countries serves as a means for MNCs to convey to the local market the message that they recognize its supreme importance to the overall company. From a knowledge point of view, the MNC is seen as a repository of knowledge that spans national boundaries. When this view is combined with network theory (e.g., Bartlett and Ghoshal 2000) and theories of the learning organization (e.g., Hedlund 1986), the MNC appears as a ‘distributed knowledge system’ (Tsoukas 1996), acquiring and transferring knowledge across its dispersed but interconnected international

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Cross-Cultural Perspectives on Knowledge Management network through vertical and lateral relationships (Bartlett and Ghoshal 2000; Hedlund 1986). These combined perspectives make knowledge and its transfer the focus of attention. Knowledge is not easy to identify. It is broader, deeper, and richer than information as this solely concerns “a message, usually in the form of a document or an audible or visible communication” (Davenport and Prusak 1998, 3) between a transmitter and a recipient. Information can be found in messages, whereas knowledge resides in individuals and groups of knowers. The well-known distinction between explicit and tacit knowledge, as defined by Polanyi (1967) and popularized by Nonaka and Takeuchi (1995), has proven useful here. Explicit knowledge, which borders on information, is “knowledge that you know you have; objective, formal, systematic, incorporated in texts and manuals, and easy to pass on to others” (Evans, Pucik, and Barsoux 2002, 35). By using software systems, explicit knowledge can be collected and distributed throughout organizations. Tacit knowledge, in contrast, is “knowledge that you do not know you have; personal, context specific, hard to formalize and communicate” (Evans, Pucik, and Barsoux 2002, 35). Polanyi (1967) explains the idea of tacitness by asserting that scientists “know more than they can tell,” especially when operating on the cutting-edge of technology. Tacitness of knowledge refers to “the indeterminacy of knowledge” (Tsoukas 1996), its contextual, contestable, and power-laden nature and the absence of knowledge when information is divorced from the act of knowing (Thompson and Walsham 2004). Tacit knowledge is not a separate category next to explicit knowledge, as Nonaka and Takeuchi treat it (Thompson and Walsham 2004), but a characteristic that pervades all knowledge. As Tsoukas explains, “all articulated knowledge is based on an unarticulated background, a set of subsidiary particulars which are tacitly integrated by individuals” (1996, 17). The comparative ratio of explicit-tacit knowledge varies according to the context and nature of the knowledge under consideration. It has been argued that in recent years, the rapid pace of industry evolution and change has caused a shift in balance towards the tacit aspects of knowledge, thereby increasing the importance of social interaction in organizations (Murtha et al. 2001). The transfer of this type of knowledge always presumes an active reconstruction on the part of the recipient, which is probably most effectively performed in case of personal contacts between knowledge transmitters and recipients (Evans, Pucik, and Barsoux 2002). When the transfer of R&D knowledge is at stake, the exploratory nature of that activity, the causal ambiguity and uncertainty of the implied knowledge put a high pressure on the tacit elements in knowledge transfer (Cummings and Teng 2003). Many mechanisms for knowledge transfer have been identified and discussed (for an overview, see Chiesa and Manzini 1996). These can be distinguished into person-based mechanisms, such as temporary assignments, international teams, personnel flows, and codification mechanisms such as the dispersal of manuals, electronic mail, and common systems based on or combined with ICT (Howells 1996; Pedersen et al. 2003). Available evidence suggests that communication based on codified sources is much less effective for knowledge transfer—and in particular for the transfer of tacit knowledge (Pedersen et al. 2003)—than personal communication, specifically when intuitive and experiencebased knowledge is at stake (Buckley and Carter 2004; Cross and Sproull 2004). The efficient transfer of tacit knowledge depends on whether or not the people involved know each other beforehand (Bresman et al. 1999).

Research and Development Knowledge Transfer across National Cultures

The Role of Culture in Knowledge Transfer The understanding of organizations, and more particularly of MNCs, as ‘distributed knowledge systems’ (Tsoukas 1996), has stimulated theoretical and empirical research on the processes and mechanisms through which knowledge is managed and transferred within MNCs (e.g., Gupta and Govindarajan 2000). Much of the research on knowledge transfer in MNCs focuses on characteristics of knowledge (Szulanski 2003; Zander and Kogut 1995) and of transmitters and recipients (Gupta and Govindarajan 2000; Szulanski 1996), and the relationship between organizational design and knowledge transfer (e.g. Birkinshaw et al. 2002; Nobel and Birkinshaw 1998; Szulanski 1996). The influence of culture on knowledge transfer is also distinctly recognized in studies of MNCs and in the broader literature on knowledge transfer in KM debates. In the many overviews of critical success factors for KM, culture always appears at the top of the list (for an overview, see Alazmi and Zairi 2003; Roman-Velazquez 2005). As regards the collected insights into the impact of culture on knowledge transfer, several observations can be made. Firstly, it is striking that thorough studies of the link between culture and knowledge transfer are more the exception than the rule. Of the many hundreds of articles and books discussing knowledge-friendly cultures, only dozens pursue a systematic development of the culture’s role in knowledge transfer. Secondly, the use of analysis frameworks produced by culture research, such as Quinn and Rohrbaugh’s competing values model (2003) or Hofstede’s models of culture types and dimensions, is not common practice in the majority of studies discussing cultural impacts on knowledge transfer. Thirdly, most studies give the impression that there is such a thing as an ideal culture for knowledge transfer, or a ‘one size fits all’ culture typified by ideal behavior and an ideal value set. Pauleen and Murphy’s complaint, set forth in their “In Praise of Cultural Bias” (2005), is appropriate. Western analytical assumptions concerning knowledge and its management dominate the discussion and provide the frame of reference to stipulate what is considered an ideal knowledge culture. Fourthly, little attention is given to cultural differences, which, given the predominating notion of a ‘one size fits all’ culture can hardly be surprising. Exchanging ideas between cultures, singularities of knowledge creation in multicultural surroundings, the existence of subcultures in organizations and the—also possibly positive—impacts of these differences on knowledge transfer are all subjects for the still mostly blank pages in discussions of culture offered by literature on KM (exceptions of articles that focus on cultural differences with respect to knowledge are Bhagat et al. 2002; Pauleen and Murphy 2005). An exploration of the role of culture in knowledge transfer should build on an understanding of that concept. Culture, both organizational culture and national culture, is generally considered a key factor for understanding how and when knowledge transfer develops. A general theme underlying the many conceptions of culture is the notion of sharing, which means that “each member participates in and contributes to the broad patterns of culture, but the contributions and experiences of individual members of the culture are not identical” (Hatch 1997, 206). The result of this notion of sharing is that culture is not only concerned with similarity—having something in common—but also with separateness—dividing something into individual pieces (Hatch 1997). Furthermore, the notion of sharing shows that culture is not merely a descriptive and static collection of artefacts, values, and assumptions of a group of people. Instead, “it consists of a common set of assumptions and values that constantly influence artefacts, especially

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Cross-Cultural Perspectives on Knowledge Management behavior, and are passed on from older to younger members of the group” (Black et al. 1992, 35). Therefore, culture is not just a pattern of action, but is a pattern for action (Collins 2000). According to this view, cultures are created, preserved, and developed on the basis of human interaction (Martin 1992). Thus, it can be argued that culture has an all-pervading influence on individuals’ actions, values, and perceptions, which they take with them when entering an organization. An organization is also affected by the culture in its environment at various levels, such as the industrial, the occupational, or the professional level. A corporation is inextricably bound up with its environment, which results in a high degree of similarity between the culture of the organization and the culture of its environment (Hatch 1997). Accordingly, the organization is a product of the societies and times in which it exists; it is solely a manifestation of prevailing beliefs and values (Harris et al. 2003). The same argument is provided by Hofstede (2001), who argues that within a given national culture, organizational cultures differ very little with respect to the deeper values, but diverge with respect to rather superficial perceptions of daily practices. Therefore, Hofstede argues, “multinational organizations are kept together by shared practices, not by shared values … international cooperation consists of doing things together, even if each partner does them for a different reason” (Evans, Pucik, and Barsoux 2002, 168).

CONCEPTUAL APPROACH The discussion in the previous section shows the all-pervading influence of culture on actions, values, and perceptions, including those affecting knowledge transfer within an organization. What it also indicates is the limited value of the conception, which is recognizable in many KM writings on culture, that culture as the independent variable is causally related to knowledge transfer as the dependent variable. Culture pervades knowledge transfer and surfaces in the visible and invisible knowledge transfer behavior in organizations. The connections between the two are therefore best understood as conceptual relations, where notions of culture may act as selection mechanisms for approaching those aspects and facets of knowledge transfer that are culturally laden. Without developed notions of culture, such aspects and facets will become less visible or not visible at all. Therefore, a study such as this one, that aims to detect how national culture influences knowledge transfer, needs to assess the state of knowledge transfer in an organization by a selection of knowledge transfer aspects guided by cultural notions. Such an assessment will simultaneously serve as a measurement of the knowledge transfer culture of the organization and the culturally determined state of knowledge transfer. It presumes the construction of an instrument for dedicated culture appraisal based on aspects of knowledge transfer, showing how differences in national culture guide knowledge transfer. Below, an instrument for performing such an assessment is presented along with its application within the context of the ANCR case study. The conceptual approach taken in this research for defining and linking the two elements that are combined in this assessment—culture and knowledge transfer—are described in the following paragraphs.

Operationalization of Culture An extensive body of literature has emerged concerning values relating to cultural diversity among countries. In the early 1970s, Hofstede (1980) undertook a landmark

Research and Development Knowledge Transfer across National Cultures study in this field by conducting an opinion survey at IBM with over 116,000 respondents from 53 countries around the world. For the comparison of nations, Hofstede borrowed four dimensions from earlier anthropological culture research: those of power distance, uncertainty avoidance, individualism vs. collectivism, and masculinity vs. femininity, later adding the fifth dimension of long-term vs. short-term orientation to reflect cultural differences in East Asian societies. Although this model has been subject to criticism as regards the internal validity of the dimensions and may be understood as the cultural product of a European mindset, Hofstede’s work continues to dominate the field of national cultural values (Evans, Pucik, and Barsoux 2002). More recently, Hampden-Turner and Trompenaars (2000) have also compiled a large database on the variety of value orientations among different countries. Their approach is based on seven cultural dimensions, which partly overlap with Hofstede’s dimensions. Based on the above-mentioned authors, seven dimensions of national culture have been selected that can be related to knowledge transfer. The next paragraph describes how these dimensions were connected to aspects of knowledge transfer. The first dimension is that of power distance. According to Hofstede (2001), power distance concerns the extent to which less powerful members of organizations accept that power is distributed unequally. Nations with a ‘large power distance’ tend to accept centralized power and depend heavily on superiors for structure and direction. Secondly, this research uses the dimension of uncertainty avoidance, defined by Hofstede (2001) as the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these. This feeling is expressed through nervous stress, an avoidance or even punishment of risk-taking and the need for security, predictability, and written and unwritten rules. The third dimension is that of individualism vs. collectivism. According to Hofstede (2001), individualism is concerned with the tendency of people mainly to look after themselves and their immediate family, which tends to produce much individual initiative and a focus on gaining self-respect and personal achievement. Collectivism, on the other hand, involves the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty. In these countries, people focus on fitting in harmoniously and on face-saving. Fourthly, the cultural dimension of masculinity vs. femininity is examined. Masculinity pertains to dominant social values being material success, money, and possessions, and embraces assertiveness, competition, recognition, and advancement as key values (Hofstede 2001). Dominant values in societies characterized by femininity are caring for others and the quality of life. In these countries, great importance is placed on a friendly atmosphere, consensus and cooperation through interpersonal and interdependent relationships. The fifth dimension brought into this research is that of long-term vs. short-term orientation, described by Hofstede (2001) as the extent to which people’s reference time frame is focused on achieving either long-term goals or the more immediate short-term goals. Countries with a ‘long-term orientation’ adhere to the values of longterm commitment and respect for tradition, thereby supporting a strong work ethic where today’s hard work will result in long-term rewards. However, countries with a ‘short-term orientation’ do not embrace long-term devotion to traditional and forward thinking values. As a result, commitment will not form a barrier to change, thereby increasing the speed of change.

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Cross-Cultural Perspectives on Knowledge Management Sixthly, from the work of Hampden-Turner and Trompenaars (2000) their dimension specific vs. diffuse was added. According to these authors, people from a specificoriented culture (low context) believe that relationships with others should be explicit, regulated and purposeful as a contract. Separate chunks of information are valued, as individuals later integrate these into a whole. In diffuse cultures (high context) on the other hand, relationships are established carefully but once established they encompass multiple areas of life and are not restricted to “just business.” Information is always seen as fully embedded within the context of conveying it, implying that individual pieces of information are void of meaning without that context. Finally, the dimension neutral vs. affective is explored. Hampden-Turner and Trompenaars (2000) describe neutral cultures as those in which emotions are held in check whereas affective cultures express emotions openly and naturally.

Knowledge Transfer Model A multitude of factors affecting knowledge transfer have been identified in the literature, and many models have been proposed to capture these factors. Based on an intersection of these models (e.g., Cohen and Levinthal 1990; Gupta and Govindarajan 2000; Hinds and Pfeffer 2003) and borrowing Cummings’ and Teng’s (2003) terminology, but expanding their model, these factors can be ordered into eight contexts: (1) the pre-transfer context, (2) the transmitter context, (3) the recipient context, (4) the channel or activity context, (5) the knowledge context, (6) the relational context, (7) the environmental context, and (8) the post-transfer context (see Figure 12.1). The core of knowledge transfer lies in an individual or group (transmitter context) transferring knowledge to another individual or group (recipient context) via a selection of channels (activity context). As regards both transmitter and recipient, a distinction is typically made between (a) factors affecting the disposition of the involved parties, captured by such concepts as motivation, trust, willingness, eagerness, and attitude, and (b) factors affecting ability, proficiency, competence, and skill. The knowledge context (3) refers to the properties of knowledge affecting the transfer process between transmitter and receiver. The pre- and post-transfer contexts (1 and 8) refer to those factors that relate to recognition of knowledge transfer value and the absorptive capacity of the organization in using the transferred knowledge (Cohen and Levinthal 1990; Gupta and Govindarajan 2000). The relational (6) and environmental (7) contexts refer to the factors that affect the distances between transfer parties (for instance, physical distance, distance caused by organization structure and other institutional settings) and the organization’s economic and social environment (including national culture and market pressures). These two contexts concern factors affecting receiver, transmitter, and connection, given the type of knowledge. For this research, the distinction between the disposition and competence of transmitters and recipients was chosen as the starting point for selecting indicators (see Figure 12.1). From among the factors affecting knowledge transfer described in the literature (Cummings and Teng 2003; Hinds and Pfeffer, 2003), those factors have been selected that appear as most relevant in cross-cultural R&D settings and that can readily be interpreted in terms of the selected seven cultural dimensions. Because of their interpretation in cultural terms, the selected factors serve as indicators for the knowledge transfer culture within MNCs. The first group of factors contains indicators related to

Research and Development Knowledge Transfer across National Cultures Figure 12.1 Knowledge transfer model (adapted from Cummings and Teng 2003; Hendriks 1999; Hinds and Pfeffer 2003).

the disposition of individuals to engage in knowledge transfer, both for the transmitter and recipient context. The second group concerns indicators that relate to the ability of individuals (both transmitter and recipient context) to effect complete and successful transferral, which depends heavily on the content of the knowledge to be transferred (knowledge context). The third group of indicators refers to the channel choice (activity context). The other contexts in the model—the environmental, relational, pre- and posttransfer contexts—are represented by the selected indicators.

Connecting Culture and Knowledge Transfer Figure 12.2 summarizes the knowledge transfer factors used in this research and the assumed cultural dimensions behind them. The cultural dimensions have been linked to knowledge transfer determinants based on literature (including Bhagat et al. 2002; De Long and Fahey 2000; Ford and Chan 2003; Hooff and Hendrix 2004; Kayworth and Leidner 2003). The factor of disposition—the willingness to transfer knowledge—has led to the identification of six indicators of a knowledge transfer culture. Firstly, the structure and management practices within organizations can induce an atmosphere of competition between individuals or units. In these circumstances, knowledge is equated with status, promotions, and power (Hinds and Pfeffer 2003). Furthermore, an intolerance for mistakes and need for help will discourage the transfer of knowledge throughout the organization (Davenport and Prusak 1998). In this research, this is linked to the cultural dimension of masculinity. As Ford and Chan (2003, 13) argue, “Cultures that are high in masculinity (i.e., competitiveness) may also have more difficulty with knowledge sharing if the competitiveness is between individuals and not only between organizations.” Moreover, the atmosphere of competition in masculine cultures makes it more likely that these cultures equate knowledge more frequently with status, promotions, and power than feminine cultures.

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Cross-Cultural Perspectives on Knowledge Management Figure 12.2 Indicators of the impact of national culture on knowledge transfer.

Legend: PD = power distance; UA = uncertainty avoidance; IDV = individualism; MAS = masculinity vs. femininity; LTO = long-term orientation; SPEC = specific vs. diffuse; NEUT = neutrality vs. affectiveness (Hofstede 1980; Hampden-Turner and Trompenaars 2000). The plus and minus signs after the description of the indicators indicate the assumed direction of the relationship between dimension and indicator (plus = “agree” implied by/follows from higher score on dimension, minus = “agree” implied by/follows from lower score on dimension).

Secondly, institutionalizing explicit rules for transferring knowledge is not always an effective method for facilitating the transfer process since it is excessively focused on compliance and conformity. This is not in line with the practice of knowledge transfer since it entails the development of a shared understanding that requires time and room. Uncertainty avoidance can be assumed to be the main cultural influence here (Bhagat et al. 2002; Kayworth and Leidner 2003). Uncertainty avoiding cultures are expected to have more institutionalized rules for transferring knowledge compared to uncertainty embracing cultures because explicit rules have to be created to maintain security and predictability. Kayworth and Leidner (2003) argue that when cultures favor stability and direction, as uncertainty avoiding cultures do, knowledge storage is bound to increase.

Research and Development Knowledge Transfer across National Cultures Knowledge storage can be perceived as knowledge transfer with an added retention focus. An associated aspect is the tendency of organizations to focus on explicit instead of tacit knowledge in their knowledge transfer routines. Thirdly, a related organizational characteristic is the existence of traditional status hierarchies. The formal status hierarchies are mainly focused on transferring instructions downward and information upward. This means that people are reluctant to transfer knowledge in ways that violate the rules of the hierarchy. Consequently, there are less horizontal and lateral knowledge flows and even vertical flows are limited since high status personnel do not acknowledge the value of knowledge that they receive from lower-status people (Davenport and Prusak 1998; De Long and Fahey 2000; Hinds and Pfeffer 2003). The associated cultural dimension is that of power distance. When power distance is high, knowledge is more likely to flow top-down through the hierarchy than bottom-up and it is more likely to follow the paths of the hierarchy than not (Ford and Chan 2003). The existence of formal status hierarchies in cultures that emphasize power distance will make people more reluctant to transfer knowledge in ways that violate the rules of the hierarchy than people from power distance avoiding cultures. Fourthly, a similar argument applies to the horizontal direction of an organization, i.e., the ‘not-invented-here’ syndrome. If this syndrome occurs, knowledge and ideas that are developed in a different context will be valued less in the environment of the recipient, thereby inhibiting the process of knowledge transfer (Davenport and Prusak 1998; Hinds and Pfeffer 2003; Hooff and Hendrix 2004). Differences between individualistic and collectivistic cultures are considered to lead to differences with respect to this factor (Ford and Chan 2003; Hooff and Hendrix 2004). Individualistic cultures are more likely than collectivistic cultures to run the risk of a ‘not-invented-here’ syndrome because knowledge and ideas that are developed in a different context will be valued less due to the emphasis on individual initiative and personal achievement. Fifthly, the practice of transferring knowledge requires effort and time for documenting expertise and for being involved in social interactions. Organizations do not always provide the necessary time and meeting places for transferring knowledge, based on the belief that conversations are not ‘real work,’ Consequently, people will be reluctant to be involved in the transfer of knowledge (Davenport and Prusak 1998). This is related to the dimension of long-term orientation (Ford and Chan 2003). Organizations in long-term oriented cultures are expected to provide more time and meeting places for documenting expertise and being involved in social interactions than short-term oriented cultures since the advantages of KM are acknowledged by their emphasis on thinking ahead. Sixthly, relationships of trust and credibility between the transmitter and recipient represent a crucial dispositional factor. Knowledge transfer is a people-to-people process, thereby asserting that a lack of personal ties will inhibit the transfer of knowledge, especially the transfer of tacit knowledge (Szulanski 2003). Furthermore, trusting the larger institution in which knowledge is transferred is important. In this respect, any actions by the organization that destroy trust will make knowledge transfer less likely to occur (Hinds and Pfeffer 2003). Masculinity versus femininity is bound to surface in this knowledge transfer factor. Feminine cultures are more likely to view knowledge transfer as a people-to-people process than masculine cultures because

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Cross-Cultural Perspectives on Knowledge Management the development of relationships of trust and credibility between the transmitter and recipient is facilitated. While dispositional factors constitute an important element in understanding the difficulty in transferring knowledge across organizations, it is clear that also competence factors, which concern the way experts store and process information, could be barriers for transferring expertise to others (Hinds and Pfeffer 2003). This factor of ‘being able to’ can originate from various aspects. Four factors were used in this research. For reasons explained subsequently, three of these factors were included separately for the transmitter and recipient viewpoints, which explains the presence of seven indicators covering the competence side in the instrument. Firstly, competence is related to how ‘visible’ knowledge can be made, due to what Tsoukas calls the indeterminacy of knowledge as embedded in social practice (1996). During their work, experts will view their task in a holistic way, thereby automating certain aspects and leaving the details aside. Consequently, the mental representations of experts will become abstract and conceptual (Hinds and Pfeffer 2003). These simplified representations of the task serve the experts well, although they can be problematic if this knowledge needs to be transferred to people with less expertise. The establishment of a common ground and the use of a language that is understandable to the recipient can be very helpful for the transmitter as well as the receiver in the transfer process (Davenport and Prusak 1998; Hinds and Pfeffer 2003). The associated cultural dimension is that of individualism versus collectivism. Knowledge about a task is likely to be more invisible in individualistic cultures than in collective cultures because individualism tends to lead to explicit knowledge being transferred more easily than tacit, whereas collectivism implies a balance in explicit-tacit knowledge transfers (Bhagat et al. 2002; Hooff and Hendrix 2004). The cause for this invisibility lies in the fact that an expert can automate certain aspects of the task, thereby leaving the details aside. In individualistic cultures this is likely to have a negative impact on knowledge transfer, due to the fact that a common ground for interaction is neither apparent nor necessary. Because the resulting lack of visibility takes on a different meaning for transmitters and receivers in knowledge transfer situations, it was used as an indicator twice (first, to assess how transmitters experience difficulty in deducing visible chunks from their holistic, automated knowledge; next, to check how well receivers are able to recognize the more encompassing knowledge below the visible surface of the transferred information). Secondly, a difficulty is the causal ambiguity of knowledge, which means that experts experience uncertainty in their understanding of why the exemplar works. This implies that the precise reasons for functioning cannot be determined, thereby causing a gap between the formal description and the actual work practices. This limits the understanding of the transmitter of what has to be transferred and of the receiver of what knowledge is actually received (Simonin 1999; Szulanski 2003). The most obviously related cultural dimension is that of uncertainty avoidance, since experts in cultures that embrace uncertainty will experience less causal ambiguity in their knowledge because they rely less on formal descriptions as compared to cultures that avoid uncertainty (cf. Bhagat et al. 2002). Once more, the situation for transmitters is different from that for recipients. Therefore, in this research a distinction was made between radiating and understanding causally ambiguous knowledge.

Research and Development Knowledge Transfer across National Cultures Thirdly, the articulation of tacit knowledge, rather than explicit, is a challenging activity, due to the fact that tacit knowledge exists at an unconscious or semiconscious level and because of its embeddedness in the social context (Hinds and Pfeffer 2003). These characteristics imply that human, cultural, and communication factors are of crucial importance to transferring knowledge. More particularly, due to the cultural and communication differences between the transmitter and the recipient in the international arena, transfer of knowledge is more complex and extensive faceto-face communication is needed (Marcotte and Niosi 2000). An obvious connection is established with the cultural dimension of femininity versus masculinity. Tacit knowledge will be articulated more easily in feminine than in masculine cultures. Feminine cultures value cooperation through interpersonal relationships, which is required for transferring tacit knowledge. The relevance with regard to the distinction between the transmitter and receiver position changes for this factor, too. Therefore, separate statements are included in figure 12.2 to represent the involved barrier for either of these roles. Fourthly, the absorptive capacity of recipients can vary widely among the subunits of an organization. This capacity is concerned with the “ability to recognize the value of new information, to assimilate it into their own different context, and to apply it to commercial ends” (Evans, Pucik, and Barsoux 2002, 433). Furthermore, absorptive capacity challenges the existing way of doing things, thereby inducing the recipients to unlearn and making knowledge very “sticky” (Lin et al. 2002; Szulanski 2003). Differences as regards long-term vs. short-term orientation are bound to surface in this factor. Long-term cultures are more likely to recognize the future value of new knowledge, thereby assisting the absorption of knowledge, than short-term oriented cultures since their time horizon focuses on forward thinking and achieving long-term goals (Ford and Chan 2003; Kayworth and Leidner 2003). Because this factor is mostly relevant from the receiver’s perspective, no statement is included in Figure 12.2 for the transmitter standpoint. In addition to the disposition and competence factors, knowledge transfer is influenced by the existence and richness of communication or transmission channels, i.e., the mode of transfer. A multitude of transfer mechanisms can be observed, such as electronic linkages, face-to-face meetings, seminars, project groups, personnel flows, and boundary spanning roles. Some of these channels are “narrow band,” which only permit the transfer of information and explicit knowledge, such as intranet systems or electronic communication. In contrast, “broad band” channels, such as personnel transfers, allow for transferring tacit knowledge (Evans, Pucik, and Barsoux 2002). Davenport and Prusak (1998) assert that it would be advisable for organizations to transfer knowledge through multiple transfer modes in order to reinforce each other’s usage. Specific and neutral cultures, that characterize such countries as the Netherlands and the USA, are expected to more often choose the “narrow band” transmission channels that are mainly focused on explicit knowledge (cf. Straub et al. 1997). The reasoning behind this choice is that relations are only needed for business activities—not for social affairs—thereby making it unnecessary to show emotions since these would only confuse the issues. The “broad band” transmission channels that are predominantly focused on tacit knowledge are most likely to be used by diffuse and affective cultures, such as the Indian culture, in order to make interaction possible and allow emotions to be expressed naturally and openly.

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CASE DESCRIPTION AND RESEARCH METHODS The context of this research is the Research and Development (R&D) facilities of MNC Akzo Nobel. This multicultural company is headquartered in the Netherlands and serves customers throughout the world with healthcare products, coatings, and chemicals. Akzo Nobel conducts these diversified activities in over 80 countries through the decentralized business units of Pharma, Coatings, and Chemicals and employs approximately 64,500 people. This research focuses on Akzo Nobel Car Refinishes (ANCR), which forms part of Coatings. This group is operational in 60 countries and employs approximately 30,000 people. ANCR supplies the paint, services, and the required software for car repair and commercial vehicles, while acknowledging local customer needs. This research has been conducted within the main R&D facilities of the product area Car Refinishes at Sassenheim (the Netherlands), Troy (USA), and Bangalore (India). The R&D facility of Sassenheim, established in 1939, is the oldest of the three. In 1984, the R&D facility in Troy was founded, while the R&D facility in Bangalore has been operational since 2001. In total, these three R&D facilities employ approximately 300 R&D professionals.2 Although the KM movement has been apparent throughout Akzo Nobel for some time, KM activities have only recently been employed consciously within ANCR due to the strong internationalization of the product area, the expansion of its R&D activities and the possibility to share knowledge with other product areas. In this start-up phase, the KM practices of Car Refinishes are predominantly focused on developing a multitude of transmission channels and creating a structured approach for documenting knowledge in order to allow the R&D professionals to share knowledge. In the end, these efforts should enable the R&D professionals to gain world-wide access to highquality knowledge and retain this knowledge within the organization. Nevertheless, at present, the KM activities are surfacing at the data and information level, whereas the broader and deeper notion of knowledge is hardly touched. This is because the lion’s share of the efforts are focused on building systems, which indicates that the emphasis is on hardware, i.e., the technology, while the soft elements are still largely ignored. Furthermore, these KM practices are currently not employed on a large and broad scale throughout the product area of Car Refinishes. This research focuses on the differences in perceptions and practices of knowledge transfer among the three distinct national cultures of the Netherlands, the USA, and India. Akzo Nobel has traits of a decentralized organization that, according to interviewees at the start-up phase of this research, does not have a strong organizational culture. Moreover, within the various R&D facilities distinct organizational cultures cannot be found. As a result, the influence of the diversity in national cultural values on knowledge transfer is considered more important. Consequently, it can be argued that ANCR provides a proper context for exploring the knowledge transfer process in relation to diversity in national cultures. As shown in Figure 12.3, the national cultures of the three countries involved in this research are quite different. For some dimensions, all three countries are relatively similar (uncertainty avoidance and neutrality), whereas for others all are relatively different (long-term orientation). Furthermore, the Netherlands and the USA have rather similar ratings regarding power distance, individualism, and specificity. For the masculinity dimension, the Netherlands distinguishes itself from the other two countries. This

Research and Development Knowledge Transfer across National Cultures Figure 12.3 National cultures of the Netherlands, the United States, and India (source: HampdenTurner and Trompenaars 2000; Hofstede 2001).

indicates some of the complexities involved in the bipartite and tripartite knowledge transfers among these R&D facilities. The assumed relations between cultural dimensions and aspects of knowledge transfer have been described in 17 statements, which are verbalizations of the connections described in Figure 12.2. Via questionnaires, these statements have been presented to the R&D professionals at the R&D facilities in the Netherlands, the US, and India. For every statement, respondents were asked whether they agreed with it and what effect the crosscultural situation as regards the statement had on knowledge transfer (“makes transfer easier,” “has no effect,” or “makes transfer more demanding”). Preceding the statements, a question was included to assess the relative weight of electronic linkages and personal contacts in actual knowledge transfers (ratio electronic linkages-personal contacts 0–100, 25–75, 50–50, 75–25, or 100–0). An interview with the International Product Development manager at Akzo Nobel Car Refinishes showed that, at the time of the investigation, 65 of them were involved in international knowledge transfers. All these 65 R&D professionals were approached via a questionnaire, of which 33 responded, either immediately or after a reminder (a response rate of 50.8%). The small size of the sample shows the explorative nature of this research. The aim is, via the situation of ANCR, to explore the information value and workability of linking culture and knowledge transfer in the way described above and thus to typify ANCR’s knowledge transfer in a multi-cultural context. The aim is not to generate general conclusions for other knowledge transfer situations.

FINDINGS The presentation of the research findings is ordered around four topics. These concern (1) an assessment of knowledge transfer culture at ANCR, (2) the impact of cultural differences on knowledge transfer, (3) the relative influence of disposition, competence,

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Cross-Cultural Perspectives on Knowledge Management and channel choice, and (4) differences in cultural impact as regards tacit versus explicit knowledge. The first topic concerns whether and how the knowledge transfer culture of the units included in this research differ compared to the diversity in culture of the countries involved. In other words, how far do differences in national culture pervade the R&D units when their knowledge transfer is at stake? The empirical data presented in Table 12.1 show that the different national cultures frequently score differently on the various cultural dimensions proposed by Hofstede, Hampden-Turner, and Trompenaars (see Figure 12.3). More specifically, on the one hand, the research findings show that often a cultural incompatibility is experienced in a cultural dimension in which the national cultures are expected to be attuned. On the other hand, national cultures appear to be wellmatched in cultural dimensions in which large cultural inconsistencies are anticipated. Regarding power distance, the difference between the two nations is echoed for the Indian and Dutch R&D facilities. The Indian site shows a much higher power distance than the Dutch one. This is reflected in an average verdict of 1.25, or mostly “Agree,” as to the experienced effect of power distance on knowledge transfer. However, the USA, which would be expected to be close to the Dutch value, is equidistant between the other two countries. This indicates that the knowledge transfer behavior at the US site is more affected by the rules of the hierarchy than anticipated. The scores for uncertainty avoidance are remarkably attuned to the national figures. All sites appear more uncertainty avoiding than risk-taking in their knowledge transfer behavior and all equally uncertainty avoiding (all around 1.78). This indicates that the transfer process is to some extent directed by rules and formal descriptions. Collectivism appears visible in all sites, not just—as would be expected—in the Indian R&D facility. It is particularly striking that the US site appears even less individualistic than the Indian one. Regarding masculinity the higher score on that dimension in the national figures is reflected in the data for the American and Indian sites. It is evident that the Dutch site appears more close to a neutral score than in the national figures, which shows a mixed picture as regards the importance of trust, the absence of competition, and personal contacts. The national differences with respect to long-term orientation appear not to permeate the knowledge transfer cultures of ANCR since the Indian, Dutch, and American facilities have similar ratings on this orientation. This indicates that, just like the Indian site, the Dutch and American sites do not experience the barriers associated with lacking a long-term orientation, such as insensitiveness to future knowledge value or time needed for reflection. Also as regards specificity, all sites appear to incline towards a diffuse culture. This implies that relations are not just considered necessary for business, but should also be of a social nature. Consequently, face-to-face interactions are seen as important. It is also noteworthy that, when it comes to specificity, at ANCR’s R&D facilities the Indian and Dutch cultures are much closer than the Dutch and American cultures, as Hofstede’s national figures would suggest. Regarding neutrality the data reproduce to a great extent the similarity between the three cultures that appears at the national level. All scores are not far from 2, which could be read as an indication that a combination of electronic linkages with seminars and project groups is considered valuable. Knowledge transfer partners would need broad band channels such as are present in seminars and teams so they can openly convey the emotions associated with the shared knowledge.

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Table 12.1 The knowledge transfer cultures at Akzo Nobel Car Refinishes R&D units Dimension PD

UA

IDV

MAS

LTO

SPEC

NEUT

Country

Agree

Neutral

Disagree

Average

NL

0.25

0.19

0.56

2.31

United States

0.30

0.56

0.15

1.85

India

0.75

0.25

0.00

1.25

NL

0.35

0.50

0.15

1.79

United States

0.34

0.53

0.12

1.78

India

0.32

0.59

0.09

1.76

NL

0.17

0.51

0.32

2.15

United States

0.15

0.30

0.55

2.39

India

0.20

0.23

0.57

2.37

NL

0.27

0.43

0.30

2.03

United States

0.31

0.45

0.23

1.92

India

0.41

0.41

0.17

1.76

NL

0.34

0.47

0.19

1.84

United States

0.35

0.47

0.19

1.84

India

0.50

0.32

0.18

1.68

NL

0.07

0.28

0.66

2.59

United States

0.15

0.40

0.44

2.29

India

0.04

0.39

0.57

2.54

NL

0.21

0.34

0.45

2.24

United States

0.23

0.44

0.33

2.10

India

0.15

0.42

0.42

2.27

Legend: The rows represent the seven cultural dimensions used in this research (see Figure 12.2). The cell figures give the proportion of respondents that selected the corresponding answers aggregated over the indicators per dimension. The average scores have been calculated by coding the first answer category as 1, the second as 2, and so on. For indicators that are inversely related with the dimension (see the minus signs in Figure 12.2), the “Agree” answers have been counted as “Disagree” and vice versa.

The most striking differences in knowledge transfer cultures of the three R&D sites relate to the dimension of power distance. For the dimensions of individualism, masculinity, long-term orientation, and specificity, clear disparities are also recognizable, but for the other dimensions the differences appear smaller compared to the situation in which the differences in national culture would have fully surfaced in ANCR. The scores for uncertainty avoidance and neutrality appeared most clearly aligned with the national figures. These combined findings suggest that the professional culture of R&D work with its centripetal forces is generally stronger than the national culture. What the aggregate level of the data in Table 12.1 disguises is that respondents from different countries in some instances appear to experience different cultural distances on a single cultural dimension since they have provided different answers for questions that relate to one specific cultural dimension. This occurrence complicates the exploration of

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Cross-Cultural Perspectives on Knowledge Management knowledge transfer in relation to the diversity in national cultures along various cultural dimensions. The second topic addresses the impact differences in national cultures have on knowledge transfer. When differences occur, do these make transfer easier or more demanding, or do they have little effect? Table 12.2 presents a summary of the data collected in this research that answer this question. The results show that the respondents from each national culture perceive knowledge transfer to often be demanding. However, when the transfer of knowledge is deemed demanding, small cultural distances are perceived among the national cultures. The indicators that appear associated with most knowledge transfer problems in Table 12.2 do not typically coincide with the dimensions with the largest cultural differences as shown in Table 12.1. Apparently, the knowledge transfer process is not perceived to be demanding due to large cultural distances. What the aggregate figures in Table 12.2 do not show is that both American and Dutch respondents mostly argue that large cultural distances will have no effect on the transfer process. A major difference between the American and Dutch respondents groups is that those American respondents who do recognize an effect of cultural distances on knowledge transfer typically think that these will make the transfer of knowledge easy, whereas Dutch R&D professionals who see an impact of cultural diversity mostly argue that this diversity makes knowledge transfer more demanding. However, voices pointing to a positive or negative effect of cultural difference on knowledge transfer are the minority; the prevalent opinion is that cultural diversity has little or no impact on knowledge transfer. This implies that the arguments of such authors as Simonin (1999) and Ford and Chan (2003), who assert that diversity in national cultures complicates the transfer of knowledge, are only partially supported by the research findings. Overall, the research findings suggest that transferring knowledge is problematic, whether in a situation of diverse or compatible national cultures. This suggests that the impact of national culture on the transfer of knowledge is less powerful than the influence of the three general elements of the transfer process (the dispositional, competence, and transfer mode factors). The third topic discussed here concerns the relative impact of the discerned groups of factors—the disposition, ability, and channel choice factors. Table 12.2 shows that the average for indicators 1 through 6 (disposition) is 2.09 (close to “no effect”), for indicators 7 through 13 (competence) it equals 2.43 (more demanding) and for 14 through 17 (channel) the average value is 2.02 (also close to “no effect”). Overall, these data suggest that ability factors involve more impediments to knowledge transfer than both disposition and choice of channel. Below the surface of aggregation in Table 12.2, the outcome indicates that each country holds a different view on how diversity in national cultures affects the three general elements of the transfer process. According to Dutch R&D professionals, the dispositional factors are perceived to be mainly affected by diversity in national cultures, the mode of transfer sometimes, and the competence factors hardly ever. On the other hand, the American R&D professionals feel that the effect of a diversity in national cultures is large for the mode of transfer, moderate for the competence factors and small for the dispositional factors, while the Indian group leaders primarily experience effects of cultural differences on the dispositional and competence factors, whereas the choice in mode of transfer is influenced only sporadically. Therefore, the research findings indicate that within each culture the three general elements of

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Table 12.2 Assessment of cultural differences and their impact on cross-cultural R&D knowledge transfer at Akzo Nobel Car Refinishes Opinion on statements

Effect on knowledge transfer

Agree

Neutral

Disagree

Average

Easy

No effect

Demanding

Average

1

0.08

0.37

0.55

2.47

0.16

0.58

0.26

2.11

2

0.49

0.44

0.06

1.57

0.26

0.26

0.47

2.21

3

0.38

0.38

0.24

1.85

0.18

0.36

0.45

2.27

4

0.17

0.28

0.54

2.37

0.17

0.42

0.42

2.25

5

0.34

0.46

0.20

1.86

0.50

0.20

0.30

1.80

6

0.40

0.45

0.15

1.75

0.50

0.09

0.41

1.91

7

0.09

0.39

0.52

2.43

0.06

0.35

0.59

2.53

8

0.26

0.53

0.21

1.96

0.10

0.14

0.76

2.67

9

0.36

0.42

0.22

1.87

0.14

0.48

0.38

2.24

10

0.24

0.38

0.38

2.13

0.05

0.40

0.55

2.50

11

0.22

0.67

0.11

1.89

0.00

0.23

0.77

2.77

12

0.42

0.51

0.07

1.65

0.05

0.37

0.58

2.53

13

0.43

0.40

0.17

1.74

0.47

0.26

0.26

1.79

14

0.10

0.36

0.54

2.44

0.19

0.52

0.29

2.10

15

0.20

0.45

0.35

2.14

0.45

0.23

0.32

1.86

16

0.53

0.37

0.10

1.58

0.45

0.25

0.30

1.85

17

0.07

0.37

0.56

2.48

0.10

0.52

0.38

2.29

Legend: The rows represent the 17 statements used in this research (see Figure 12.2).The cell data give the proportion of respondents that selected the corresponding answers. The average scores have been calculated by coding the first answer category as 1, the second as 2, and so on.

the knowledge transfer process are affected by diversity in national cultures to varying degrees. A possible explanation is that during the action of transferring knowledge, the various cultural dimensions coming into play are rated differently in the three countries. Accordingly, these different value orientations distinctly influence the three general elements of the transfer process. This is congruent with Hofstede’s line of argument (2001), asserting that national culture distinguishes groups of people, in this case from the Netherlands, the United States, and India, thereby influencing the “shoulds” and “oughts” of their actions—in this case, the transfer of knowledge. Fourthly, the cultural diversity surfacing in the content-related side of knowledge transfer was inspected—more specifically, the tacit and explicit sides to knowledge. The results provide indications that the respondents experience a more complex process for transferring explicit knowledge than tacit knowledge. These indications stem from two sources. Firstly, two variables were calculated to represent the explicit-tacit ratio in knowledge transfers and the experienced transfer problems generated by cross-cultural distance, respectively. The first variable was computed based on the question asking respondents about the ratio between the use of electronic linkages and personal contacts

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Cross-Cultural Perspectives on Knowledge Management in their actual knowledge transfers with other sites (the answer category “0% via electronic linkages—100% personal contacts” was recoded to 1, the answer category “25% via electronic linkages—75% personal contacts” to 2, etc.). This variable shows an average of 3.45 (standard deviation of 0.75), which indicates that the R&D professionals use a mixture of personal contacts and electronic linkages for the transfer of knowledge between the R&D facilities, with a certain preference for personal contacts. The assessed effect of cultural distance on knowledge transfer was determined by recoding “easy” answers for the 17 statements as -1, “no effect” answers as 0, and “demanding” answers as 1, and calculating per respondent the ratio between these recoded answers. This variable shows an average of 0.14 (standard deviation of 0.3), indicative of the fact that overall, respondents deem knowledge transfers demanding. The correlation between the two variables is -0.37 (significant at 95% reliability). The negative sign for the correlation between the ratio electronic linkages-personal contacts (or explicit-tacit knowledge) and the variable representing the effect of culture on knowledge transfer indicates that cultural distances will mainly affect the transfer of explicit knowledge, while this effect will decrease during the transfer of tacit knowledge. The second indication of more severe problems associated with explicit knowledge transfer across cultures is given by the figures in table 12.2. On the whole, respondents “disagree” with the group of indicators relating to explicit knowledge (indicators 7, 10, 14, and 15 in Table 12.2), whereas they fluctuate between “Neutral” and “Agree” regarding indications of tacit knowledge transfer (indicators 9, 12, 16, and 17 in Table 12.2). However, when this is compared to how cultural differences have an impact on the knowledge transfer processes (the last column in Table 12.2), it shows that the effects of cultural distances will increase when explicit knowledge is being transferred. These latter empirical results are at odds with the argument offered by many authors, including Bhagat and others (2002) and Evans, Pucik, and Barsoux (2002), who stress that the influence of diversity in national cultures should be most prevalent in the transfer of tacit knowledge, because this requires more social interaction than transferring explicit knowledge. However, while the sample size prevents any definitive conclusions, it makes sense that transferring explicit knowledge is considered to be more affected by cultural differences than tacit knowledge transfer. The story told by explicit knowledge is necessarily incomplete. When culture affects the ability to interpret explicit knowledge communicated via impersonal channels, doubts as to interpretability and reliability are bound to increase compared to a situation where the people who explicated their knowledge are present to provide the necessary background information and fill in the blanks.

CONCLUSION The following list summarizes the key implications of the research presented in this chapter. •

Differences in national culture at country level are unreliable indicators of differences in the national cultures among R&D facilities located in different countries. As the basis for an adequate understanding of the cultural differences among R&D facilities in different countries and as a guide for drafting appropriate KM programs, generally available figures on differences in national cultures have limited value. Within an individual MNC, a dedicated assessment of the cultural differences and compatibilities is called for

Research and Development Knowledge Transfer across National Cultures

•

•

•

•

•

•

that includes notions of national culture, for instance, along the lines described in the chapter. The research suggests that differences and compatibilities in the professional cultures of R&D are more important factors affecting cross-cultural R&D knowledge transfer than aspects of national culture or organization culture. Knowledge transfer among R&D professionals and R&D facilities is challenging and often problematic. However, other factors than differences in national culture are stronger explanations for the perceived problems than cultural diversity. Also within the same cultural group, R&D knowledge transfer is typically demanding. In the case study, cultural differences were experienced most frequently as having no or only little impact on R&D knowledge transfer. Less frequently, they were thought to ease knowledge transfer among R&D facilities. Least frequently, cultural diversity was seen as an impediment to R&D knowledge transfer. The ability to engage in R&D knowledge transfer was considered a more important factor for understanding barriers to knowledge transfer than disposition or channel choice. Perceptions of the impact of culture on R&D knowledge transfer, both regarding the nature of that impact and the differentiated role of such factors as ability and disposition, were found to differ with culture. Cultural differences have less impact on the transfer of tacit R&D knowledge transfer compared to when explicit knowledge is being transferred. However, that does not mean that tacit knowledge transfer is considered to be less demanding. Instead, the demanding nature of this type of knowledge transfer is seen as mostly independent from cultural differences.

The case of the three R&D facilities of Akzo Nobel Car Refinishes confirms the view that knowledge transfer within a multinational is a complex and difficult issue. However, a diversity in national cultures does not necessarily have to cause or intensify disturbances in knowledge transfer, since respondents have indicated mostly experiencing only small cultural differences, while undergoing a demanding transfer process. Moreover, several R&D professionals have asserted that large cultural discrepancies will not affect the transfer of knowledge, or will even make it easier. Consequently, it can be argued that the impact of national culture on the transfer of knowledge is less than the influence of the three general elements of the transfer process: disposition and competence of transfer partners, and transfer mode. Furthermore, on the whole, competence factors are considered to imply more important potential barriers than the other two elements. However, the R&D sites in the different countries appear to hold divergent views on the relative weight of these factors. In comparison to the overall picture, the American respondents attached more importance to the mode of transfer, whereas the Dutch respondents gave priority to dispositional factors. An interesting outcome of the study is also that diversity in national cultures was found predominantly to affect the transfer of explicit knowledge, and much less that of tacit knowledge. Nonetheless, the responses also suggest that the transfer of tacit knowledge may be more demanding than transferring explicit knowledge. Apparently, transferring tacit knowledge is considered difficult in any situation, either within or between cultural groups. Cultural incompatibilities will not significantly add to the difficulties. In contrast, the lower degree of effort associated with transferring explicit knowledge appears to lead to the appearance or reinforcement of all kinds of barriers when that

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Cross-Cultural Perspectives on Knowledge Management transfer crosses cultural borders. Similar culturally-determined interpretation backgrounds are apparently considered crucial for grasping the subtleties that hide below the surface of the explicated knowledge, such as its applicability in new situations and the level of confidence and trustworthiness associated with that knowledge. Any generalizations based on this research should be made with care because of its limitations. These include the small sample size, the imbalance in the sample composition with an underrepresentation from the Indian site, the fact that it was not assessed how strong culture is at the different sites, and the fact that no test was performed to check the results against a measurement of culture in ANCR other than by using generally available figures of national cultures. However, the results described above provide interesting observations with clear practical implications for ANCR and comparable MNCs. These include the idea that paying attention to KM practices aimed at facilitating knowledge transfer among R&D facilities in different national cultures is indispensable. More specifically, it is advisable to direct different dedicated KM activities to the three general elements of the transfer process—the dispositional and competence factors, and the mode of transfer—while respecting the knowledge-friendliness of the local cultures. In this case study, an overall focus on competence factors appears to be advisable, e.g., through knowledge transfer training classes or adaptations in the organization structure. Such an overall programme should be complemented with additional measures honoring the local approach to knowledge transfer. For instance, in the case study an additional focus on dispositional elements appears wise for the Dutch site—for instance, via an HRM programme—whereas the American situation calls for specific attention to channel considerations. This research confirms that it makes sense for MNCs to distinguish between the transfer of explicit and tacit knowledge since these two processes are influenced in a different way by diversity in national cultures. In contrast to common views, however, this research implies a definite need to pay attention to cultural barriers for transferring explicit knowledge, since cultural incompatibilities mainly affect this transfer. At the same time, the transfer of tacit knowledge should not be ignored, as this forms the basis for facilitating explicit knowledge transfer. Other MNCs with R&D seats in similar countries as ANCR’s should not automatically copy this combined focus in their KM programmes. Differences in national culture have proven to be unreliable predictors of different knowledge transfer cultures. A general assessment of national or organizational culture is therefore hardly useful as a basis for drafting KM programmes. The type of cultural assessment attuned to the needs and peculiarities of knowledge transfer that was described in this paper generates much more useful information. Overall, it is recommended, based on a dedicated assessment of differences in knowledge transfer cultures, not to rely on standard KM programmes but to use a set of KM practices that is attuned to the specific situation of the organization in order to reduce the potentially negative, culturally differentiated, impact of the three general elements (disposition, competence, and channel) on the transfer of explicit and tacit knowledge within MNCs. Many authors have argued that knowledge transfer in itself can be and very often is a problematic affair, mostly because of its cultural connotations. While this research does not dispute this statement and even confirms it in several respects, it refines it and provides it with a more positive interpretation. Cultural differences among the transfer partners may have the effect of intensifying knowledge transfer problems, but they

Research and Development Knowledge Transfer across National Cultures may also lead to a reduction of these. This research therefore confirms that cultural differences are not just barriers to knowledge transfer, but may also provide a stimulus to learn from and with others in other cultures (Pauleen and Murphy 2005). Further research in this area could explore the value of adopting an emic approach to reduce the risk of essentializing representationalism inherent in etic approaches such as those of Hofstede, Hampden-Turner, and Trompenaars.

NOTES 1. The research described in this chapter was performed in 2004 by Marjolijn Thiessen as the basis for her master’s thesis in business administration. The other two authors were involved in this research as supervisor (Caroline Essers) and coreader (Paul Hendriks). 2. For further information on the company, see their Web site: www.carrefinishes.com.

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Cross-Cultural Perspectives on Knowledge Management Eisenhardt, K. M., and F. M. Santos. 2002. Knowledge-based view: A new theory of strategy? In Handbook of Strategy and Management, eds. A. Pettigrew, H. Thomas and R. Whittington, 139–64. London: Sage. Evans, P., V. Pucik, and J.-L. Barsoux. 2002. The global challenge: Frameworks for international human resource management. Boston: McGraw-Hill/Irwin. Ford, D. P., and Y. E. Chan. 2003. Knowledge sharing in a multi-cultural setting: A case study. Knowledge Management Research & Practice 1 (1): 11–27. Ghoshal, S., H. Korine, and G. Szulanski. 1994. Interunit communication in multinationalcorporations. Management Science 40 (1): 96–110. Grant, R. M. 1996. Toward a knowledge-based theory of the firm. Strategic Management Journal 17: 109–22. Gupta, A. K., and V. Govindarajan. 2000. Knowledge flows within multinational corporations. Strategic Management Journal 21 (4): 473–96. Hampden-Turner, C. M., and F. Trompenaars. 2000. Building cross-cultural competence: How to create wealth from conflicting values. Chichester, UK: Wiley. Harris, H., C. Brewster, and P. R. Sparrow. 2003. International human resource management. London: Chartered Institute of Personnel and Development. Hatch, M. J. 1997. Organization theory: Modern, symbolic, and postmodern perspectives. Oxford: Oxford University Press. Hedlund, G. 1986. The hypermodern MNC: a heterarchy. Human Resource Management 25(1): 9–35. Hendriks, P. H. J. 1999. Why share knowledge? The influence of ICT on the motivation for knowledge sharing. Knowledge and Process Management 6(2): 91–100. Hinds, P. J., and J. Pfeffer. 2003. Why organizations don’t ‘know what they know’: Cognitive and motivational factors affecting the transfer of expertise. In Sharing expertise: Beyond knowledge management, eds. M. S. Ackerman, V. Pipek and V. Wulf, 3–26. Cambridge, MA: MIT Press. Hofstede, G. H. 1980. Culture’s consequences: International differences in work-related values. Beverly Hills, CA: Sage. . 2001. Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. 2nd ed. Thousand Oaks, CA: Sage. Hooff, B. v. d., and L. Hendrix. 2004. Eagerness and willingness to share: The relevance of different attitudes towards knowledge sharing. Paper read at Organizational Knowledge, Learning and Capabilities Conference (OKLC 2004), Innsbruck. Howells, J. 1996. Tacit knowledge, innovation and technology transfer. Technology Analysis & Strategic Management 8(2): 91–106. Kayworth, T., and D. Leidner. 2003. Organizational culture as a knowledge resource. In Handbook on Knowledge Management, ed. C. W. Holsapple, 235–52. Berlin: Springer. Kogut, B., and U. Zander. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science 3(3): 383–97. . 1993. Knowledge of the firm and the evolutionary-theory of the multinational-corporation. Journal of International Business Studies 24(4): 625–45. Lin, C. H., B. R. Tan, and S. F. Chang. 2002. The critical factors for technology absorptive capacity. Industrial Management & Data Systems 102(5–6): 300–308. Marcotte, C., and J. Niosi. 2000. Technology transfer to China: The issues of knowledge and learning. Journal of Technology Transfer 25(1): 43–57. Martin, J. 1992. Cultures in organisations: Three perspectives. New York: Oxford University Press. Murtha, T. P., S. A. Lenway, and J. A. Hart. 2001. Managing new industry creation: Global knowledge formation and entrepreneurship in high technology. Stanford, CA: Stanford University Press.

Research and Development Knowledge Transfer across National Cultures Nobel, R., and J. Birkinshaw. 1998. Innovation in multinational corporations: Control and communication patterns in international R & D operations. Strategic Management Journal 19(5): 479–96. Nonaka, I., and H. Takeuchi. 1995. The knowledge-creating company: How Japanese companies create the dynamics of innovation. Oxford: Oxford University Press. Pauleen, D. J., and P. Murphy. 2005. In praise of cultural bias. MIT Sloan Management Review 46(2): 21–22. Pedersen, T., B. Petersen, and D. D. Sharma. 2003. Knowledge transfer performance of multinational companies. Management International Review 43(3): 69–90. Penrose, E. T. 1959. The theory of the growth of the firm. Oxford: Blackwell. Polanyi, M. 1967. The tacit dimension. London: Routledge Kegan Paul. Quinn, R. E., and J. Rohrbaugh. 1983. A spatial model of effectiveness criteria: Towards a competing values approach to organizational analysis. Management Science 29(3): 363–77. Roman-Velazquez, J. 2005. An empirical study of organizational culture types and their relationship with the success of a knowledge management system and the flow of knowledge in the U.S. government and nonprofit sectors. In Creating the discipline of knowledge management, ed. M. Stankosky, 66–91. Amsterdam: Elsevier. Simonin, B. L. 1999. Ambiguity and the process of knowledge transfer in strategic alliances. Strategic Management Journal 20(7): 595–623. Straub, D. W., M. Keil, and W. Brennan. 1997. Testing the technology acceptance model across cultures: A three country study. Information & Management 33:1–11. Szulanski, G. 1996. Exploring internal stickiness: Impediments to the transfer of best practice within the firm. Strategic Management Journal 17:27–43. 2003. Sticky knowledge: Barriers to knowing in the firm. Sage Strategy Series. London: Sage. Thompson, M.P.A., and G. Walsham. 2004. Placing knowledge management in context. Journal of Management Studies 41 (5): 725–47. Tsoukas, H. 1996. The firm as a distributed knowledge system: A constructionist approach. Strategic Management Journal 17(Winter): 11–26. Zander, U., and B. Kogut. 1995. Knowledge and the speed of the transfer and imitation of organizational capabilities: An empirical test. Organization Science 6(1): 76–92.

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Afterword

First of all, I would like to offer my congratulations to the authors for taking on such a difficult but valuable assignment. It would be hard to imagine management research more abstract then investigating the relationship between knowledge and culture, to say nothing about then offering some help to these managers in actually doing something about these issues. Yet it also would be hard to find work more needed by organizations. As our work becomes more complex, more virtual, and more dependent on geographically distributed cognition, we are all assailed by what Toffler notably called “diseconomies of complexity.” However, neither he nor almost anyone else took on the greatest yet most subtle constraint of them all—culture. Culture is a killer concept. In the 1950s it was reckoned to have more than 160 distinct definitions, and Raymond Williams wrote in his classic Keywords (1975) that it was one of the two or three most complex words commonly used in English. Even in common conversations, just a bit of reflection will indicate how elusive the varied meanings of the term can be. Yet, just travel a bit to a different culture than your own and you can see, feel, apprehend, sense, and touch just how different everything is. Even in cultures such as Japan’s that seemingly look like Western ones (or Anglo-based ones), the assumptions and underlying emotions, values, and beliefs are very different. Yet when one takes apart, as best one can, the concept of culture and tries to see what influence it has on knowledge, there are three threads, or distinct and measurable parts of culture, that emerge from both theoretical and empirical research and from working with management. The first one that is clear is beliefs. One widely quoted definition of knowledge (originating in classical Greek thought) is “justified true belief.” Although one may pick at this definition, or any other definition of knowledge, it is generally thought of as legitimate and at least partially true. Well, how much of culture is made up of beliefs? Surely, a great deal. Some would say that culture is nothing else but beliefs. In any case, it is impossible

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Afterword to speak of knowledge without speaking of beliefs in some way, and it is equally impossible to speak of culture without speaking of beliefs. Yet this easy syllogism is ignored over and over again in the day-to-day practice of management. Firms continue to buy systems and develop processes to manage global activities with scarcely any reference to either concept (though knowledge gets its nose under the tent more often these days). It surely is easier to just buy a system or develop a process without reference to these concepts. It is nearly impossible to actually measure knowledge or cultures in the whole, and as we all know, what cannot be measured does not get done in our efficiency-crazed world. Yet at what cost do we ignore these things? How do we measure misunderstandings and false assumptions? Does any one person stand up and say, “This project was delayed or done poorly because we did not understand the cultural beliefs and assumptions of our varied global team members.” Just writing this sentence out illuminates how rare its utterance would be in any meeting or boardroom. But it is true, based on my own observations and those of many colleagues in the knowledge movement, that lack of understanding of underlying beliefs of project participants is a major cause of project failures. And these beliefs are a major part of any person’s cultural inheritance. A second critical part of culture is trust. There has been a bull market in trust lately, with economists and sociologists leading the charge in researching and attempting to measure trust in societies and organizations and in one’s personal life. Some of these writings have been very helpful in bringing the concept to the meeting and even to the boardroom. I would go so far as to state that like social network analysis, trust is one of those subjects that have made a successful migration from the academy directly into practice. Yet trust, too, is a vital part of culture, as all good social theorists know well. There are high-trust and low-trust societies and cultures, as well as organizations, and this variable alone has a terrific effect on the economics of an organization. It is also vital to effective knowledge management. How can one ever think of having a knowledge system or process in place when there is no trust. Who would share anything of value with people one did not trust? Not only would that be irrational; it would also be self-destructive. Most organizations that I have worked with made an assumption of general trust throughout the organization in terms of knowledge sharing. This has proven to be false, and this failure has caused many executives to question the very value of any systematic way to work with knowledge. Again, because trust (and lack of trust) is a substantial part of what we mean when we discuss culture, we had best understand it better if we ever want to improve knowledge flows and sharing in any setting. The last aspect of culture and knowledge is in a sense the most abstract one. It is the simple but complex fact that knowledge itself is never a stand-alone entity; it is entwined with culture, institutions, and the economic structures of any society. This embeddedness is one of the most important things we have learned about knowledge since organizational knowledge research began in earnest about 15 years ago. It makes knowledge a very different resource than land, labor, or capital, which can be moved around the world with greater and greater speed and efficiencies. Knowledge is contextual, sticky, and local. It requires greater understanding of its setting and environment for it to be effectively used. In short, knowledge is so wrapped up with culture that it can almost be seen as being a part of culture, as some have claimed.

Afterword All of these reflections leave us with many puzzles. Serious researchers will be looking at how these issues will, or will not, be addressed for many years to come. The now small number of studies such as this one will be growing greatly in the near future as work becomes increasingly global and complex. Again, the current authors are to be applauded for being pioneers in a new land with porous boundaries and unsettled landmarks. Laurence Prusak, Distinguished Scholar in Residence, Babson College

REFERENCE Williams, R. 1975. Keywords: A vocabulary of culture and society. London: Fontana.

247

Index

Absorptive capacity: knowledge transfer and, 72, 76, 231; management of, 72, 76 Academic settings, KM and, 111 Academy of Management Executive (AME), 67 Action Framework, mental models component of, 205–7 ADEX. See Exporters Association of Peru Adler, N. J., 7–9 Adler’s model, national culture and, 8–9 Advanced Research Projects Agency (ARPA), 51 Akzo Nobel Car Refinishes (ANCR), 219; KM movement at, 232–38; R&D at, 232–33 AME. See Academy of Management Executive ANCR. See Akzo Nobel Car Refinishes ARPA. See Advanced Research Projects Agency ARPANET, 51 Asian culture: concept of face in, 181; EuroAmerican management theories within, 175 Axelrod, Robert, 203–4 Axelrod Theory of Cooperation, 203–4, 207 Berman, Sanford, 85 Berners-Lee, Tim, 52 Boundary spanning model: for KM, 29–31; syntactic vs. semantic levels of, 29–32 Burki, Shahid Javed, 199

Cadres, 139–43 CAF. See Competitiveness Program of the Andean Development Council Canada, patenting in, 103–4, 106 Canadian Patent Act, 106 Cerf, Vincent, 51 Checa, Jose, 210 China: bribery and corruption in, 169–70; business, interpersonal relationships in, 163–65; central planning in, 169; culture of fear in, 168–69; group-based incentives, rewards in, 166; IJVs in, 161; knowledge sharing in, 158, 160–62, 164, 170–71; market economies in, 169; means vs. ends in, 164; organizational structures in, 162, 171; property rights in, 103, 107; SOEs in, 164; trust, implicit communication in, 165–66 Cillóniz, Fernando, 212 Civilization, culture and, 36 Cognitive processes: Asian vs. Western, 26–27; neurological basis for, 27, 32; SapirWhorf hypothesis and, 27 Communication: technology impact on, 53–54; twentieth century, 140. See also Implicit communication Competence, 69; knowledge transfer and, 230–31 Competition: mental models and, 206; at microeconomic level, 206; in socialist economies, 145

250

Index Competitive advantage: knowledge and, 176; knowledge sharing and, 157 Competitiveness Program of the Andean Development Council (CAF), 207 Confucian society: consensus, collectivism in, 129; hierarchy in, 112 Context: holistic understanding of, 85; Klemke typology of, 86; knowledge and, 72–73, 84–87 Contextual knowledge, 72–73 Contingency: knowledge and, 59; management of, 59; in portal societies, 46–48 Cooperation: foundation for, 204; human instincts and, 205; in low-trust environment, 201–7; in zero sum world, 204. See also Reciprocity and cooperation Corporación Latinobarómetro, 196 Country Competitiveness Practice, 205 Craft knowledge, patenting and, 97 Cross-cultural knowledge, management models, schemes and, 69–71 Cultural convergence: HKNET projects and, 125–27; normative need for, 127 Cultural learning, HKNET projects and, 123–25 Cultural stretch, 72, 77 Cultural Values and Human Rights Symposium, 197 Culture: Adler’s model of, 8–9; anthropologically derived concepts of, 5; civilization and, 36; conceptual approach to, 223–31; construction of, 4–5; content of, 4–5; defined, 4, 26, 197; incentives and, 168; Japanese, 7, 36; knowledge sharing across, 81; knowledge system of, 112; learning and, 26–29, 28; operationalization of, 224–25; practice, research and, 14–15; progress and, 197; progressive vs. static, 197–98; romantic, 35–36; sharing and, 223; subculture and, 6; sustainability of, 4–5; transmission of, 5; values, attitudes, behaviors and, 7–8. See also National culture Cybernetics, 55 Data, information, knowledge and learning, 23–25 Dewey Decimal System (DDC), 84 Dresher, Melvin, 202 E-commerce: intellectual property and, 101; patent protection and, 101 Economic development, patenting and, 100–101 Europe, socialist economies in, 136

Exfrusur, 210 Expatriates: as knowledge mediators, 77; local business community and, 74; management and, 75 Exporters Association of Peru (ADEX), 210–11 Fairbanks, Michael, 205, 207 FDI. See Foreign direct investment Flood, Cerril, 202 Foreign direct investment (FDI), 158 Foreign employees, as cultural resources, 74–75 Frió Aéreo, 211–16 Fundación Perú, 212 Game theory, 202 Globalization: cost-efficiency of, 221; ICT and, 3; MNCs and, 221; patents, patenting and, 107; Peru impact by, 208 Global knowledge economy, ICT and, 3 Global outsourcing, 4 Global patent system: KM and, 95. See also Patents, patenting Govindarajan, V., 70 Grondona, Mariano, 198 Groundwork of the Metaphysics of Morals (Kant), 45 Group, communal ownership, 101–2; individual vs., 102. See also Ownership Group Support System technology, in HKNET projects, 129 Guanxi, 112 Guilds, 97, 102, 105 Gupta, A. K., 70 Hermeneutic theory, 87–88 Hierarchy: in Confucian society, 112; employee attitudes toward, 187, 189; harmony within, 112; HKNET projects and, 121–23; knowledge transfer and, 229; modern bureaucratic, 50; network order vs., 50; normative, cultural need for, 113; order and, 48, 50; patron-client, 48 HKNET projects: characterization rankings and, 124; cultural convergence and, 125–27; cultural learning and, 123–25; evolution of, 115; expected, encountered problems and, 120–21; findings of, 119–27; Group Support System technology in, 129; hierarchy, leadership and, 121–23, 126; HKNET1, 115–16; HKNET2, 116; HKNET3, 116–17; HKNET4, 117; HKNET5, 117–18; HKNET6, OHKNET,

Index 118; HKNET7, BOHKNET, 118; KM in VTs and, 112; Mainland Chinese and, 119; participation in, 113; research questions for, 114; synchronous vs. asynchronous communication and, 112–13, 130–32; team activities in, 114; team composition in, 114; technology for, 114; technology providers and, 131 Hofstede, Geert, national cultural dimensions of, 180–81 Hong Kong, 41 ICT. See Information and communication technologies IJV. See International joint ventures Implicit communication, trust and, 165–66, 170–71 Incentives, cultural conventions and, 168 Individuality: in Latin America, 201; performance vs., 141 Information: design and, 59; knowledge vs., 222; uncertainty and, 44–46 Information and communication technologies (ICT): globalization and, 3; global knowledge economy and, 3; KM and, 3 Information infrastructure, standardization vs. flexibility in, 83 Information management, KM and, 11 Information retrieval (IR), in networked environment, 81 Information theory, hermeneutics for, 87–88 Innovation: economic, social force of, 36; ownership of, 103; patents and, 95; portal cities, regions and, 40 The Intellectual Foundation of Information Organization (Svenonius), 90 Intellectual property, 95; in China, 107; ecommerce and, 101; protection of, 108 Intelligence, pattern production and, 56 International Country Risk Guide, 199 International joint ventures (IJVs), 159; in China, 159 Internet: KO and, 82; semantic Web and, 83 Invention: act of, 99; defined, 107; patenting and, 99–100 IPEH. See Peruvian Asparagus Institute IR. See Information retrieval Japanese culture, 7, 36 Journal of Managerial Psychology (JMP), 68 Kahn, Robert, 51 Kant, Immanuel, 45 Klemke, R., 85–86

251 KM. See Knowledge management KMS. See Knowledge management systems Knowledge: aesthetic ordering and, 38; art of systems and, 36–39; causal ambiguity of, 230; cognitive-aesthetic, 60; commons roots of, 59; competitive advantage and, 176; conceptualization of, 23; context and, 72–73, 85–87; contingency and, 59; cross-contextual discovery of, 89–91; cross-cultural, 69–71; cultural dimension of, 21; data, information, learning and, 23; definitions of, 86; distribution of, 38; Eastern vs. Western traditions of, 7; formative, 37; holistic vs. analytical, 7; as ignorance, 37; individualism vs. collectivism and, 230; information vs., 222; KM and, 175–76; learning and, 21; literature on, 137; management of, 57–60; national culture and, 7; recursive, circular, 22, 24–25, 52–57; as strategic asset, 21–22; symmetry and, 37; tacit vs. explicit, 25–26, 67, 69, 73, 77, 136, 138, 151, 222, 231, 239; universal ordering of, 83; upstream, downstream sharing of, 12–13. See also Craft knowledge; Knowledge management; Knowledge organization; Knowledge transfer; Pattern knowledge Knowledge community, 82 Knowledge creation, 69–70; Nonaka and Takeuchi theory of, 69–70; socialization stage of, 70 Knowledge management (KM): academic settings and, 111; best practice vs. contingent approach to, 190–91; boundary spanning model for, 29–31; cultural biases regarding, 14; generational development of, 176; goals for, 24; HKNET project and, 111–12; ICT-based strategies and, 3; information management and, 11; knowledge and, 175–76; learning organization and, 175–78; literature on, 4, 176; models of, 12; motivational foundations of, 150; in multicultural organizations, 29–31; national culture and, 11, 13, 128–32, 189–91; Nonaka SECI model of, 12; organization, culture and, 10–13; research on, 220; socialist economies and, 137–38; social process of, 11; strategies for, 190–91; in VTs, 111–12. See also Management Knowledge management systems (KMS): cultural, ethnic backgrounds and, 22; cultural gap in, 22; limitations of, 29 Knowledge organization (KO): bias and, 84; cross-contextual, 89–91; hermeneutics for,

252

Index 87–88; Internet and, 82; library concept of, 82–83; ontology and, 84–85; semantic tools for, 82–83; subject access in, 83–84; unified classification systems for, 84–85 Knowledge sharing: in China, 158, 160–62, 164, 170–71; competitive advantage of, 157; cross-cultural, 160; institutional, cultural influences on, 162–70; one-way knowledge transfer vs., 158; resistance to, 161; in Russia, 158, 160–62, 164, 170–71 Knowledge transfer: absorptive capacity and, 72, 76, 231; anticipation in, 68–69; atmosphere of, 71; competence and, 230–31; cultural stretch and, 72, 77; culture’s role in, 223–24, 227–31; explicit rules and, 228; Gupta/Govindarajan typology of, 70; linear, 71; literature review, 159; management failure and, 71; meaningless, 73; mechanisms for, 222; in MNCs, 220–22; model of, 226–27; modes of, 231; national culture impact on, 228; research, practice in, 159; status hierarchies and, 229; trust, credibility and, 229 KO. See Knowledge organization Konosuke Matsushita, 9 Kuhn, T. S., 87 Labor: classes of, 141; international movement of, 157; political control of, 139; work vs., 140, 149 Language, contextual bias of, 81 Latin America: individualism in, 201; institutional development in, 199–200; social capital in, 196; Spanish conquest impact on, 201; trust levels in, 195–96, 199–200; values, culture, development in, 196–99 LCHS. See Library of Congress Subject Headings Leadership, 9–10; HKNET projects and, 121– 23, 126; national culture and, 9–10; in organizations, 9–10; in Peruvian business, 208 Learning: coercive, 181; culture and, 26–29, 28; infant studies on, 28; knowledge and, 21; learning organization and, 177; organizational, 177. See also Team learning Learning and knowledge, individual, organizational, 23 Learning culture, creation of, 181–82 Learning organization: bureaucratic system and, 188; collective commitment, avoidance and, 182–85; as concept, 187–88; cultural gap and, 177–78; ethnographic fieldwork in, 179; experimentation constraints of, 184; KM and, 175–78; learning

and, 177; management style and, 188; national culture impact on, 189–90; power relations and, 188; shared vision in, 182–84; Singaporean government as, 179; Singapore organizations and, 189; trusting relationships in, 186–87 Lenin, Vladimir, 139–43 Letts, José, 210 Library of Congress Subject Headings (LCHS), 84 Licklider, J.C.R., 51 Lindsay, Stace, 205, 207 Loyalty, performance and, 143–46, 150–51 Management: absorptive capacity of, 72, 76; of contingency, 59; cross-cultural issues in, 178; expatriates and, 75; as informants, 74; of knowledge, 57–60; knowledge transfer and, 71; political task of, 138 Matsushita, 9 Meaning, construction of, 26 Mental models: competition and, 206; motivation and, 206; strategic decision-making and, 206 MNC. See Multinational corporations Morgenstern, Oskar, 202 Motivation: KM and, 150; for patenting, 150; socialist economies and, 150 Multicultural organizations, KM in, 29–31 Multinational corporations (MNCs), 158; as distributed knowledge systems, 223; globalization and, 221; knowledge transfer in, 220–22; research and development activities of, 219–20 NAFTA. See North American Free Trade Agreement Napier, Nancy, 75 National borders, subcultures within, 6 National culture, 5–7; Adler’s model and, 8–9; Hofstede model of, 180–81; incentives and, 168; individualism vs. collectivism and, 225; KM and, 11, 13, 189–91; knowledge and, 7; knowledge transfer impact by, 228; leadership and, 9–10; learning organization impact by, 189–90; legitimacy of, 5–6; long- vs. short-term orientation and, 225; masculinity vs. feminism and, 225; neutral vs. affective, 226; organizational culture and, 8, 13; organizational literature on, 180; power distance and, 225; specific vs. diffuse, 226; uncertainty avoidance and, 225; VTs and, 128–32; work-related attitudes and, 5

Index Navigational order, 51 Network connections, relations, 49; in open society, 57 Network orders, hierarchies vs., 50 Networks: IR and, 81; large scale effectiveness of, 51; TCP for, 51 Network society, 50 Neumann, John von, 202 New generation KM (NGKM), 11 Nonaka, I., 70 Nonaka SECI model, of KM, 12 North American Free Trade Agreement (NAFTA), 106 Open society, network connections, relations in, 57 Order: aesthetic, 38; contingency and, 44–48; hierarchy and, 48, 50; navigational, 51; planar, 49; in portal cities, regions, 40; selforganizing, 40; technology and, 49 Organizational culture: national culture and, 8, 13; in subsidiary operations, 163 Organizational learning. See Learning organization Organizational psychology, cross-cultural issues in, 178 Organizational structures: Chinese, 162, 171; Russian, 162–63, 171; Western, 162 Organizations: as distributed knowledge systems, 223; global rights of, 95; leadership in, 9–10; structure, management practices within, 227. See also Multicultural organizations Outsourcing. See Global outsourcing Ownership: individual vs. group, 102; of innovation, 103; patenting and, 98. See also Group, communal ownership Paris Convention for the Protection of Industrial Property, 106 Patent Cooperation Treaty (PCT), 106 Patents, patenting: in Canada, 103–4; craft knowledge and, 97; cross-cultural perspective on, 95–96; cross-licensing agreements and, 105; cultural systems of, 108; e-commerce and, 101; economic development and, 100–101; enforcement of, 103–5; English vs. American system, 103–4; first-to-file principle and, 104; firstto-invent principle and, 104–5; globalization and, 107; guilds and, 97; historical roots of, 96–99, 101–2, 105–6; individual vs. corporate, 103; infringements of, 105; innovation and, 95; international, 106–7;

253 invention and, 99–100; inventor’s interests and, 100; of life forms, 98; management and, 96, 103, 107; monopolies and, 100; motivations for, 99–101; NAFTA and, 106; ownership and, 98; Paris Convention for the Protection of Industrial Property and, 106; PCT and, 106; property rights and, 96; of software, 98–99, 101, 105; specification and, 104; trade secrets and, 99; TRIPS and, 106; WIPO and, 106; WTO and, 106. See also Global patent system Pattern knowledge, 37, 47, 56; contextualization and, 42 Pattern thinking: in aesthetic forms, 35; knowledge origin in, 35 PCT. See Patent Cooperation Treaty Perception, culture and, 28 Performance: first-order, 144; individuality vs., 141; loyalty and, 143–46, 150–51; in socialist economies, 145–47 Perry, Guillermo, 199 Peru: agricultural industry revolution in, 207–8; asparagus exports of, 209–10; business leadership in, 208; economic stabilization program in, 207–8; export crops of, 208; Frió Aéreo in, 211–16; globalization impact on, 208; judicial independence variable of, 200; reciprocity in, 201–2; trade preferences for, 208; trust levels in, 195, 200 Peruvian Asparagus Institute (IPEH), 214 Pierer, Heinrich von, 67–68 Portal cities, regions, 35, 38, 43; arts and sciences in, 41; Chicago, 43; company headquarters in, 57; dominance of, 57; emergent forms of, 41–44; Hong Kong, 41; information dissemination and, 42; innovative capacity of, 40; intelligence concentration in, 43; as intermediary, 41–42; political economy of, 41; population growth and, 43; self-organizing order in, 40; uncertainty and, 45; unsuccessful, 39; Venice, 58 Portal societies, 39–41; contingent choices in, 47; historic cases of, 39 Prejudices and Antipathies (Berman), 85 Prisoner’s Dilemma, 201–3 Property rights, in China, 103, 107 RAND Corporation, 202 Reciprocity and cooperation, 203–5 Research and development (R&D): at ANCR, 232–33; distributed, 220–22; internationalized, 221; in MNCs, 219–20 Ridley, Matt, 205, 207

254

Index Rights, enforcement of, 103–5 Roberts, Larry, 51 Roots Peru, 210 Russia: bribery, corruption in, 169–70; business, interpersonal relationships in, 163–65; central planning in, 169; culture of fear in, 168–69; group-based incentives, rewards in, 166; knowledge sharing in, 158, 160–62, 164, 170–71; market economies in, 169; means vs. ends in, 164; organizational structures in, 162–63, 171; SOEs in, 164; trust, implicit communication in, 165–66 Salas, Alvaro, 212 Sapir-Whorf hypothesis, 27 Semantic Web, 83 Singapore: concept of face in, 182; culture, learning organization in, 179–81, 189 Social capital, in Latin America, 196 Social geometries, 48–52 Social Identity Theory, 8 Socialism, economy, politics in, 143 Socialist economies: competition in, 145; cultural standards of, 135; in Europe, 136; KM and, 137–38; motivation and, 150; planning system of, 146; public vs. private in, 148; subversive surviving and, 148–49; workgroup size in, 147; work initiatives in, 147; work/organization vs. communication/organization in, 140; workplace performance in, 145–47 SOE. See State-owned enterprises Software, patenting of, 98–99, 101, 105 State-owned enterprises (SOEs), in Russia and China, 164 Subculture, within national borders, 6 Subsidiary operations, organizational culture in, 163 Svenonius, Elaine, 90 Symmetry, knowledge and, 37 Systems: art of, 36–39; contingency and order in, 44–48; information, uncertainty in, 44–46; self-organizing, 37; self-steering in, 55–56 Takeuchi, H., 70 Taoism, uncertainty and, 45 TCP. See Transport Control Protocols

Team learning, 185 Technology: communication impact by, 53–54; for HKNET projects, 114, 129, 131; order and, 49; synchronous vs. asynchronous, 130–32 Tit-for-Tat, 203–5 Trade-Related Aspects Intellectual Property Rights (TRIPS), 106 Trade secrets: patenting and, 99; sharing of, 213 Transport Control Protocols (TCP), 51 TRIPS. See Trade-Related Aspects Intellectual Property Rights Trotsky, Leon, 145 Trust: building, 215–16; in China, 165–66; cooperation and, 201–7, 216; creating atmosphere for, 75–76, 78; implicit communication and, 165–66, 170–71; knowledge transfer and, 229; in Latin America, 195–96, 199–200; in learning organization, 186–87; between management and employees, 186–87; in Peru, 195, 200; in Russia, 165–66 Uncertainty: information and, 44–46; procedural guarantees and, 45; Taoism and, 45; in traditional settings, 44 U.S. Patent and Trademark Office (USPTO), 98 USPTO. See U.S. Patent and Trademark Office Value differences, cultural dimensions of, 180 Venice, 102; as portal city, 58 Videoconferencing, HKNET projects use of, 114 Virtual teams (TM): HKNET projects and, 111–12; KM in, 111–12; national culture and, 128–3 Wiener, Norbert, 55 WIPO. See World Intellectual Property Organization Work: labor vs., 140; subversive surviving by, 148–49 World Intellectual Property Organization (WIPO), 106 World Trade Organization (WTO), 106 WTO. See World Trade Organization

About the Editor and Contributors

David J. Pauleen is a senior lecturer of Information Management at Victoria University of Wellington, New Zealand. He has done extensive research in the areas of virtual team leadership and collaboration, cross-cultural communication and management, and knowledge management. He is currently involved in research on the relationship between information and communication technologies and emerging work behaviors. His work has appeared in a number of journals including Sloan Management Review, the Journal of Management Information Systems, and the Journal of Global Information Management. He is the editor of the book Virtual Teams: Projects, Protocols and Processes (2004). Jane E. Bryson is a senior lecturer in the Victoria Management School at Victoria University of Wellington, New Zealand, and has taught in human resource management and industrial relations, organization development, and public management over a number of years. She is an organizational psychologist who has extensive practical experience in the public and private sectors as a consultant and as a human resources manager. Her recent research has included examining responses to ethical dilemmas of managers and professionals, investigating how human resource management contributes to organizational capability, and exploring influences on the development of human capability in the workplace. Luis S. Chang is an economist from the Pontifical Catholic University of Peru and holds a master’s of science degree in business studies from the London Business School. He worked for 10 years at the Central Reserve Bank of his native Peru and was general manager of the National Society of Exporters and vice-chairperson of the Securities Commission. As advisor to the minister and secretary-general of the Ministry for Industry, he coordinated the study “Building the Competitive Advantage of Peru.” He represented Peru at Asia Pacific APEC and PECC forums’ working groups. He conducted the Competitiveness Program at the Andean Development Corporation (CAF), a multilateral financial organization in Latin America. He has edited several books on competitiveness issues.

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About the Editor and Contributors Mike Chiasson is currently a senior lecturer at Lancaster University’s Management School, in the Department of Management Science, United Kingdom. His research examines how social context affects information science development and implementation, using a range of social theories (actor network theory, structuration theory, critical social theory, ethnomethodology, communicative action, power-knowledge, deconstruction, and institutional theory). In studying these questions, he has examined various development and implementation issues (privacy, user involvement, diffusion, outsourcing, cyber-crime, knowledge management, and system development conflict) within medical, legal, engineering, entrepreneurial, and governmental settings. Most of his work has been qualitative in nature, with a strong emphasis on participant observation. Sally Dexter is currently completing her doctoral thesis exploring knowledge sharing within collaborative projects in the public sector. Her research interests include public and private sector knowledge management, cross-culture knowledge management, social network analysis, and gender issues in information systems. Caroline Essers is a lecturer and doctoral candidate at the Department of International Management at the Nijmegen School of Management, Radboud University of Nijmegen, The Netherlands. She holds a master’s degree in Human Geography. Her research focuses on the identity constructions of female entrepreneurs of Moroccan and Turkish descent in the Netherlands. She previously worked for the Department of the Middle East, Radboud University of Nijmegen. Gerhard Fink is Jean Monnet Professor of applied microeconomics in European integration and director of the doctoral program at Wirtschaftsuniversität Wien, Austria. He was chair of the business faculty at Wirtschaftsuniversität Wien during 2001–2002 and director of the Institute for European Affairs (Jean Monnet Centre of Excellence) during 1997–2003. He has also taught at the Johns Hopkins University Bologna Center and at universities in Munich, Trieste, Linz, Vienna, and Krems. During 1973–1990 he was affiliated with the Vienna Institute for Comparative Studies (WIIW), of which he was director from 1984 to 1990. He is certified as a business consultant by the Austrian Chamber of Commerce. Professor Fink has published 180 articles in academic journals and authored, edited, or coedited about 15 books. He is coeditor of a Special Issue of the Academy of Management Executive on the global transfer of management knowledge (2005). He speaks German and English, and has a working knowledge of Russian, Italian, and French. Michiel van Genuchten is general manager of Philips HDSoftware, a unit of Philips electronics. He is also a professor at Eindhoven University of Technology, The Netherlands, for one day a week. He holds a master’s degree (1987) and a doctorate (1991) from the Eindhoven University of Technology. He has worked in industry since 1987, among others at Philips Electronics and GroupSupport, a software company he founded. His main interests are software as a technology, software as a business, and information technology support for virtual teams. Results of his research work have been published in journals such as IEEE Software, Journal of MIS, IEEE Transactions on Software Engineering, and IEEE Transactions on Professional Communications.

About the Editor and Contributors Paul H. J. Hendriks (PhD, Social Sciences, 1986, University of Nijmegen, The Netherlands) is Professor of Organization Studies, particularly knowledge, structures, and networks at the Nijmegen School of Management of Radboud University in Nijmegen, the Netherlands. His work has been published in a broad range of academic journals, including Organizational Research Methods; Organization, Information & Management; Journal of Information Technology; International Journal of Geographical Information Science; Knowledge and Process Management; Decision Support Systems; KnowledgeBased Systems; Expert Systems with Applications; and International Journal of Information Technology and Management. His research interests include motivation aspects of knowledge work, knowledge-friendly organization structures, knowledge exchange in regional innovation systems, and knowledge management. He teaches master courses on organizations and knowledge; master courses on technology, innovation, and organizations; and various courses on social capital, knowledge-friendly organization structures, and knowledge management at undergraduate and graduate levels at the Nijmegen School of Management and elsewhere. Nigel Holden has been Professor of Comparative and International Management at Nottingham Business School, United Kingdom, since July 2004. He previously held professorial appointments in Germany and Denmark. His book Cross-Cultural Management: A Knowledge Management Perspective (2002) was published in a Russian-language version in 2005 and will appear in Chinese translation in 2006. He is coeditor of a Special Issue of the Academy of Management Executive on the global transfer of management knowledge, which appeared in 2005. A widely traveled management educator and researcher, he has given keynote addresses to professional audiences throughout Europe as well as in Taiwan, the United States, and Russia. He speaks English, German, and Russian. Kate Hutchings (PhD, University of Queensland) is an Associate Professor in the Department of Management, Monash University, Australia. She was previously employed at the Queensland University of Technology and prior to that at the University of Queensland. She has taught in China and Malaysia as well as having held visiting positions in the United States, Denmark, and France. She has coauthored and coedited three books, and her research has appeared in Asia Pacific Journal of Management, Human Resource Management Journal, International Journal of Human Resource Management, Journal of Management Studies, and Thunderbird International Business Review, among others. A specialist in international management, her current research interests include human resources management in China, intercultural networking, and intercultural knowledge management. Maren Lehmann (Dphil) trained in print and studied design, pedagogy, and sociology at the University of Art and Design Burg Giebichenstein, Halle, Germany; at Martin-Luther-University Halle-Wittenberg, Germany; and at Bielefeld University, Germany. She has a diploma in pedagogy and a doctorate in sociology (thesis topic: inclusion and exclusion in religious observations). Dr. Lehmann was a research assistant at the Department of Sociology and Business Administration at Martin-Luther-University Halle-Wittenberg, and guest lecturer at universities in Halle, Leipzig, Weimar, and Vienna. She is working on her post-doctoral dissertation (on careers as organizational

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About the Editor and Contributors calculations with individuals) in cooperation with the Department of Fundamental Studies at University Witten/Herdecke. She speaks German and English and has a working knowledge of Russian. Chern Li Liew is a senior lecturer at Victoria University of Wellington School of Information Management, New Zealand. Chern Li’s main research interest is in understanding and enhancing user-information interaction in a digital environment. She is also interested in social informatics theory and applications, particularly in the area of cross-domain and cross-cultural knowledge discovery. She has published in Journal of the American Society for Information Science and Technology, Journal of Documentation, The Journal of Information Science, and Online Information Review. She also serves on the editorial advisory boards of Library and Information Science Research and Online Information Review. Robert Mason joined the faculty of the Information School at the University of Washington, United States, in 2005. His current research interests focus on the philosophy and ethics of technology management and the cultural aspects of knowledge management. He recently completed a research project that examined how knowledge was created and shared during implementation of enterprise systems in a consortium of state universities. He was previously on the faculties of the College of Business at Florida State University and the Weatherhead School of Management at Case Western Reserve University. Prior to working full time in academia, he operated two consulting companies and worked in industry. He is a former president of the International Association for the Management of Technology (IAMOT) and serves on the senior editorial board of Technovation. He has bachelor’s and master’s degrees of science in electrical engineering from Massachusetts Institute of Technology and a doctorate in industrial and systems engineering from Georgia Institute of Technology. Snejina Michailova is Professor of International Business at the University of Auckland Business School, New Zealand (PhD, Copenhagen Business School, Denmark). Her research interests are in international management (especially cross-cultural management), knowledge management (particularly knowledge sharing), and emerging economies (Russia and China). Much of her research has bridged these three areas in different constellations. Her work has appeared in, among others, The Academy of Management Executive, California Management Review, Journal of Management Studies, Management Learning, Journal of World Business, Organizational Dynamics, and International Management. Dr. Michailova is Europe Editor of the Journal of World Business. Peter Murphy is Associate Professor of Communications at Monash University, Australia. His most recent books include Civic Justice (2001), Dialectic of Romanticism (2004), and Australian Perspectives on Southeast Asia, Australia and the World (2005). He is currently working on a study of creativity and intellectual capital. Kala S. Retna is a lecturer at the University Teaching Development Centre at Victoria University of Wellington, New Zealand. She provides professional staff development workshops for tutors and also teaches courses in Victoria Management School, specifically an organizational behavior module for undergraduates. She has worked as a trainer and management educator for many years in a large organization in Singapore and retains an ongoing research interest on management issues in Singapore. Her main

About the Editor and Contributors areas of research, training, and consultancy at Victoria University are learning and teaching in higher education, learning organizations, and cross-cultural management. Anne-Francoise Rutkowski is assistant professor of Information Systems at the Tilburg University, The Netherlands. She received her doctorate in cognitive and social psychology. Since 1994, she has been involved in education and research activities in fundamental psychology (i.e., cognitive dissonance, causal attribution processes, post-modernist theories, and methods of research in human sciences). Since 1999, her research interests and publications have been oriented toward group support systems and bridge information science and human sciences in addressing topics such as group decision making, problem solving, virtual teams, and e-learning. Chad Saunders is a doctoral candidate in Management Information Systems at the Haskayne School of Business, University of Calgary, Canada. He has worked in various capacities within academia as an instructor and lecturer and in industry as a consultant to rapid-growth technology-based firms. His research interests focus on the knowledge management practices of professional groups with a particular interest in how technology enhances and hinders the practices of professionals such as lawyers, physicians, and software developers. Mr. Saunders has published articles in IEEE Transactions on Software Engineering, Journal of Business Venturing, and Entrepreneurship Theory & Practice. Marjolyn S. W. Thiessen holds a master’s of science in business administration (specializing in international management) from the Nijmegen School of Management, Radboud University of Nijmegen, The Netherlands. Her research has focused on the impact of national culture on the transfer of knowledge among business units of a multinational enterprise that are positioned at considerable geographical and cultural distance. Doug Vogel is professor (chair) of Information Systems at the City University of Hong Kong and an AIS Fellow. He received his master’s of science in Computer Science from University of California, Los Angeles, in 1972 and his doctorate in business from the University of Minnesota in 1986. Professor Vogel has published widely and directed extensive research on group support systems, knowledge management, and technology support for education. His research interests bridge the business and academic communities in addressing questions of the impact of information systems on aspects of interpersonal communication, group problem solving, cooperative learning, and multicultural team productivity and knowledge sharing. Dr. Vogel is especially active in introducing technology into enterprises and educational systems and researching mobile e-learning applications. Additional detail can be found at http://www.is.cityu.edu.hk/staff/isdoug/cv/. Ling-Ling Wu received her doctorate in psychology from the University of Chicago, United States, in 1995. She is currently an Assistant Professor in the Department of Information Management, National Taiwan University. Her research interests include crosscultural knowledge management and cognitive science approaches to decision making, learning, negotiation, and problem solving in the interactive information technology environment. She is on the editorial board of Research in Applied Psychology. Her work has been published in Memory and Cognition, Psychology & Marketing, Current Issues in Linguistic Theory, Sun Yat-Sen Management Review, Research in Applied Psychology, and Taiwan Academy of Management Review.

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